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library 
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San  Francisco,  California 
2007 


64-TH  CONGRESS  \  ^FMATF  (DOCUMENT 

1st  Session      }  SENATE  j     No>  415 


INDUSTRIAL  RELATIONS 


FINAL  REPORT  AND  TESTIMONY 

SUBMITTED  TO  CONGRESS  BY  THE 

COMMISSION  ON  INDUSTRIAL  RELATIONS 

CREATED  BY  THE  ACT  OF 
AUGUST  23, 1912 


VOL.  I 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 
1916 


AUTHORITY  TO  PRINT. 

[Public  Resolution  No.  15,  Sixty-fourth  Congress,  first  session.] 

Resolved  by  the  Senate  and  House  of  Representatives  of  the  United  States  of  America  in 
Congress  assembled,  That  the  final  report  of  the  United  States  Commission  on  Industrial 
Relations,  including  the  report  of  Basil  M.  Manly,  director  of  research  and  investiga- 
tion, and  the  individual  reports  and  statements  of  the  several  commissioners,  together 
with  all  the  testimony  taken  at  its  hearings,  except  exhibits  submitted  in  printed 
form,  which  shall  be  appropriately  referred  to  in  said  testimony,  be  printed  as  a  Senate 
document  under  the  direction  of  the  Joint  Committee  on  Printing;  and  that  ten  thou- 
sand additional  copies  be  printed  and  bound  in  cloth,  of  which  two  thousand  five 
hundred  copies  shall  be  for  the  use  of  the  Senate  and  seven  thousand  five  hundred 
copies  for  the  use  of  the  House  of  Representatives;  and  that  of  the  final  report  of  said 
commission  one  hundred  thousand  additional  copies  be  printed,  of  which  thirty  thou- 
sand copies  shall  be  for  the  use  of  the  Senate  and  seventy  thousand  copies  for  the 
use  of  the  House  of  Representatives:  Provided,  That  the  superintendent  of  documents 
is  hereby  authorized  to  reprint  copies  of  the  same  for  sale  or  distribution  as  provided 
by  law. 

Approved,  April  28,  1916. 


CONTEXTS  OF  VOLUME  L 


Page. 

Final  report  of  commission  (see  special  table  of  contents,  pp.  7-8) 5-269 

Testimony  taken  .at  hearings 271-1024 

Suggestions  of  expert  witnesses 273-398 

J.  D.  Beck,  member,  Wisconsin  Industrial  Commission 278 

C.  W.  Price,  assistant  to  the  Industrial  Commission  of  Wiscon- 
sin  : 285 

R.  W.  Campbell,  chairman,  central  safety  -committee,  Illinois 

Steel  Co.,  Chicago 294 

W.  H.  Cameron,  secretary,  National  Council  of  Safety 307 

Mrs.    Raymond    Bobbins,    president,    National    Women's    Trade- 
Union,  League : 309 

John  B.   Andrews,   secretary,   American   Association  for   Labor 

Legislation 319 

Herbert  Quick,  author  and  farmer 320 

Charles  W.  Holman,  University  of  Texas 333 

John  A.  Fitch,  industrial  editor,  "The  .Survey" 334 

William  M.  Leiserson,  deputy,  Industrial  Commission  of  Wis- 
consin         344 

F.  C.  Croxton,  president,  American  Association  of  Free  Public 

Employment  Offices 357,  392 

Edward  T.  Devine,  Columbia  University _ :_       358 

L.  A.  Halbert,  superintendent,  Kansas  City  Board  of  Public  Wel- 
fare   360,  364 

James  H.  Boyd,  ex-chairman,  Employers'  Liability  Commission 

of   Ohio 370 

Charles  McCarthy,  Legislative  Reference  Bureau  of  Wisconsin 377 

Meyer  Bloomfield,  director,  Vocational  Bureau  of  Boston 390 

Trade  agreements  in  collective  bargaining 399-761 

John   Mitchell,   member,   New   York    State  Workingmen's   Com- 
pensation Commission.'; 401 

Francis  S.  Peabody,  coal  operator 428 

Frank  J.  Hayes,  international  vice  president.  United  Miae  Work- 
ers of  America 449 

O.  P.  Briggs,  ex-president,  National  Founders'  Association-  - 456,550 

Joseph  F.  Valentine,  president,  International  Molders'  Union 481 

Thomas  J.  Hogan,  secretary  Stove  Founders'  National  Defense 

Association 510 

John  P.  Frey,  executive  officer  and  editor,  International  Mold- 
ers' Union 524 

Joseph   Schaffner,   secretary   and   treasurer,   Hart,    Schaffner   & 

Marx,   Chicago 564,  574 

Sidney  Hillman,  president,  Cloak  and  Skirt  Makers'  Union,  New 

York 1 566 

Earl  Dean  Howard,  manager,  labor  department,  Hart,  Schaffner 

&  Marx,  Chicago 571,  592 

Julius  Henry  Cohen,  counsel,  Cloak,.  Suit,  and  Skirt  Manufac- 
turers' Protective  Association 575,  587 

A.  Bisno,  chairman,  educational  committee,  Cloak  Makers'  Union, 

New  York 579 

James  M.  Lynch,  commissioner  of  labor,  State  of  New  York 594 

Albert  W.  Finlay,   chairman,   executive  committee,   United  Ty- 

pothetse  of  America —      609 

George  L.  Berry,  president,  International  Printing  Pressmen  and 

Assistants'  Union 620 

Otto  M.  Eidlitz.  general  contractor,  New  York 644 

3 


4  CONTENTS    OF    VOLUME    1. 

Testimony  taken  at  hearings— Continued. 

Trade  agreements  in  collective  bargaining — Continued.  Page. 

W.  J.  Spencer,  building-trades  department,  American  Federation 

of   Labor 659 

Henry  Struble,  secretary,  National  Cut  Stone  Contractors'  As- 
sociation           665 

Thomas  J.  Williams,  president,   building  trades   department, 

American    Federation    of    Labor .. 675 

Edward   A.   Crane,  architect,   Philadelphia 681 

Charles  Francis  president,  Printers'  League  of  America 683 

J.   E.   Williams,   mediator  of  labor   disputes 697 

W.  L.  Mackenzie  King,  former  minister  of  labor,  Ottawa,  Can- 
ada    713,  732 

Samuel  Gompers,  president,  American  Federation  of  Labor___  718,  738 
James   A.    Emery,   counsel,   National   Association   of   Manufac- 
turers     724,  745 

Exhibits,  printing  trades 748 

Exhibits,   building   trades    760 

Efficiency  systems  and  labor 763-1024 

Frederick  W.  Taylor,  consulting  engineer,  Philadelphia 765,  795 

John  F.  Tobin,  president,  Boot  and  Shoe  Workers'  Union,  Boston-      810 
Harrington  Emerson,  standard  of  practice  and  efficiency  engi- 
neer     822, 1021 

Charles  W.  Mixter,  time-study  man  Sentinel  Automatic  Gas  Ap- 
pliance  Co.,   New   Haven   835 

Robert  G.  Valentine,  industrial  counselor 852 

James  M.  Dodge,  chairman,  Link  Belt  Co.,  Philadelphia 862 

P.  J.  Conlon,  vice  president,  International  Association  of  Ma- 
chinists          873 

David  Van  Alstyne,  assistant  to  president,  New  York,  New  Haven 

&  Hartford  Railroad 883 

Carl  G.  Earth,  consulting  engineer,  Philadelphia 886 

A.  J.  Berres,  secretary-treasurer,  metal-trades  department,  Amer- 
ican Federation  of  Labor 899 

Sanford  E.  Thompson,  consulting  engineer,  Boston 913,  928 

N.  P.  Alifas,  president,  district  No.  44,  International  Association 

of   Machinists    940 

Henry  Lawrence  Gantt,  consulting  engineer,  Montclair,  N.  J 955 

James  Duncan,  president,  Granite  Cutters'  International  Associa- 
tion of  America  965 

John  Golden,  president,  United  Textile  Workers  of  America..  985, 1012 
Louis  D.  Brandeis,  counselor  at  law,  Boston 991 


FINAL  REPORT  OF  THE 
COMMISSION  ON 
INDUSTRIAL  RELATIONS 

INCLUDING  THE 

REPORT  OF  BASIL  M.  MANLY,  DIRECTOR 
OF  RESEARCH  AND  INVESTIGATION 

AND  THE 

INDIVIDUAL  REPORTS  AND  STATEMENTS 
OF  THE  SEVERAL  COMMISSIONERS 


THE  COMMISSION  -OK  INDUSTRIAL  RELATIONS. 

FRANK  P.  WALSH,  Missouri,  Chairman. 

JOHN  R.  COMMONS,  Wisconsin.  S.  THRUSTON  BALLARD,  Kentucky. 

FLORENCE  J.  HARRIMAN,  New  York.  JOHN  B.  LENNON,  Illinois. 

RICHARD  H.  AISHTON,  Illinois.!  JAMES  O'CONNELL,  District  of  Columbia. 

HARRIS  WEINSTOCK,  California.  AUSTIN  B.  GARRETSON,  Iowa. 

LEWIS  K.  BROWN,  Secretary' 

WILLIAM  O.  THOMPSON,  Counsel. 

BASIL  M.  MANLY,  Director  of  Research  and  Investigation. 

EXTRACT  FROM  ACT  OF  CONGRESS  OF  AUGUST  23,  1912,  CREATING  AND  DEFINING 

THE  DUTIES  OF  THE  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

That  a  commission  is  hereby  created  to  be  called  the  Commission  on  Industrial 
Relations.  Said  commission  shall  be  composed  of  nine  persons,  to  be  appointed 
by  the  President  of  the  United  States,  by  and  with  the  advice  and  consent  of  the 
Senate,  not  less  than  three  of  whom  shall  be  employers  of  labor  and  not  less  than 
three  of  whom  shall  be  representatives  of  organized  labor. 

#  *  *  #  *          .          *  * 

SEC.  4.  That  the  commission  shall  inquire  into  the  general  condition  of  labor  in  the 
principal  industries  of  the  United  States,  including  agriculture,  and  especially  in  those 
which  are  carried  on  in  corporate  forms;  into  existing  relations  between  employers 
and  employees;  into  the  effect  of  industrial  conditions  on  public  welfare  and  into 
the  rights  and  powers  of  the  community  to  deal  therewith;  into  the  conditions  of 
sanitation  and  safety  of  employees  and  the  provisions  for  protecting  the  life,  limb, 
and  health  of  the  employees;  into  the  growth  of  associations  of  employers  and  of  wage 
earners  and  the  effect  of  such  associations  upon  the  relations  between  employers  and 
employees;  into  the  extent  and  results  of  methods  of  collective  bargaining;  into  any 
methods  which  have  been  tried  in  any  State  or  in  foreign  countries  for  maintaining 
mutually  satisfactory  relations  between  employees  and  employers;  into  methods  for 
avoiding  or  adjusting  labor  disputes  through  peaceful  and  conciliatory  mediation  and 
negotiations;  into  the  scope,  methods,  and  resources  of  existing  bureaus  of  labor  and 
into  possible  ways  of  increasing  their  usefulness;  into  the  question  of  smuggling  or 
other  illegal  entry  of  Asiatics  into  the  United  States  or  its  insular  possessions,  and  of 
the  methods  by  which  such  Asiatics  have  gained  and  are  gaining  such  admission,  and 
shall  report  to  Congress  as  speedily  as  possible,  with  such  recommendation  as  said 
commission  may  think  proper  to  prevent  such  smuggling  and  illegal  entry.  The  com- 
mission shall  seek  to  discover  the  underlying  causes  of  dissatisfaction  in  the  industrial 
situation  and  report  its  conclusions  thereon. 

i  Appointed  commissioner  Mar.  17, 1915,  to  serve  the  unexpired  term  of  Hon.  F.  A.  Delano,  resigned. 
6 


CONTENTS  OF  FINAL  REPORT. 

Page. 


Letter  of  transmittal 9 

I. 

REPORT  OF  BASIL  M.  MANLY,  DIRECTOR  OF  RESEARCH  AND  INVESTIGATION,  SIGNED  BY  COMMIS- 
SIONERS WALSH,  LENNON,  O'CONNELL,  AND  GARRETSON 11-15  2 

Letter  of  submittaL 

Introduction 17 

Method  and  character  of  investigation 19 

Classification  of  witnesses  upon  industrial  subjects 20 

Summary  of  conclusions  and  recommendations 21-68 

Labor  conditions  in  the  principal  industries,  including  agriculture 21 

Existing  relations  between  employers  and  employees 25 

Causes  of  industrial  unrest 29 

Unjust  distribution  of  wealth  and  income 30 

Unemployment  and  denial  of  opportunity  to  earn  a  living 

Denial  of  justice 38 

Denial  of  the  right  of  organization 61 

Conclusions  and  recommendations 68-152 

I.  Industrial  conditions  of  adult  workmen  in  general  industries 68 

Wages 68 

Hours  of  labor 69 

Safety  and  sanitation 69 

Housing 70 

II.  Women  and  children  in  industry 71 

III.  Industrial  conditions  and  relations  on  public  utilities 73 

General 73 

Telegraph 74 

Telephone 75 

The  Pullman  Co 76 

Eailroads , 77 

IV.  Industrial  conditions  in  isolated  communities 78 

V.  The  concentration  of  wealth  and  influence 80 

VI.  The  land  question  and  the  condition  of  agricultural  labor 86 

VII.  Judicial  settlement  of  labor  claims  and  complaints 89 

VIII.  The  law  relating  to  trade  unions  and  industrial  disputes 90 

IX.  The  policing  ofindustry 92 

The  origin  of  industrial  violence 92 

State  constabulary 97 

Free  speech 98 

X.  The  conditions  and  problems  of  migratory  laborers 101 

XI.  Unemployment 103 

Extent  and  character  of  unemployment 103 

Existing  conditions  of  employment 106 

Existing  agencies  for  employment 108 

Public  employment  agencies 112 

XII.  Organization,  methods  and  policies  of  trade  unions 115 

XIII.  Organization,  methods  and  policies  of  employers'  associations 117 

XIV.  Joint  agreements 119 

XV.  Agencies  of  mediation,  investigation,  and  arbitration 120 

Proposed  plan  of  a  national  system 121 

Organization 121 

Powers,  duties,  and  jurisdiction 123 

Cooperation 124 

XVI.  Industrial  conditions  and  the  public  health— Sickness  insurance 124 

XVII   Education  in  relation  to  industry.    (See  Report  of  Commissioner  John  B.  Lennon 

on  Industrial  Education,  p.  253) 127 

XVIII.  Scientific  management 127 

Possible  benefits  to  labor  and  society 128 

Diversities  and  defects 129 

General  labor  problems 139 

Conclusions 143 

XIX.  Prison  labor -. 143 

XX.  Immigration : 144 

XXI.  Labor  conditions  in  American  colonial  possessions 145 

XXII.  Chinese  exclusion '- 147 

Constructive  suggestions: 

Changes  in  thelaw 147 

United  States  commissioners 149 

The  judicial  system 

General  administration 149 

Selection  of  inspectors \ 

Chinese  interpreters 150 

Staff  organization  at  Washington -  -  -  150 

Salary  plan 151 

Restricting 152 

7 


8  CONTENTS  OF  FINAL  REPORT. 

Page. 

SUPPLEMENTAL  STATEMENT  OF  CHAIRMAN  FRANK  P.  WALSH 153 

SUPPLEMENTAL  STATEMENT  OF  COMMISSIONER  AUSTIN  B.  GARRETSON 158 

SUPPLEMENTAL  STATEMENT  OF  COMMISSIONERS  JOHN  B .  LENNON  AND  JAMES  O  'CONNELL 161 

Criticisms  not  justified 161 

Strong  organizations  the  cure 162 

The  evidence 162 

Extent  of  unrest 163 

New  governmental  machinery  unwise 164 

The  one  true  remedy 165 

The  public's  duty 166 

II. 

REPORT  OF  COMMISSIONERS  JOHNR.  COMMONS  AND  FLORENCE  J.  HARRIMAN,  SIGNED  BY  COMMIS- 
SIONERS COMMONS,  HARRIMAN,  WEINSTOCK,  B ALLARD,  AND  AISHTON 169-230 

Enactment,  interpretation,  and  enforcement  of  labor  law 171 

Industrial  commissions 173 

Advisory  representative  council 176 

Civil  service  and  comments  on  preceding  paragraphs 180 

Commissions  and  class  conflicts 182 

Investigations 191 

Rules  and  regulations 195 

Review  by  commission 198 

Court  review 199 

Testimony 200 

Continuous  industry,  employment  and  insurance 200 

Police  and  military 201 

Legal  aid 202 

Legislation 203 

Supreme  courts 204 

Mediation  and  minimum  wage 206 

Trade  disputes 214 

Foundations 220 

Subsidies 221 

Federalfund  for  social  welfare 221 

Immigration 225 

Farmers  and  farm  laborers 226 

Corporation  eontrol 228 

Dissenting  opinion  of  Commissioner  Harris  Weinstock 230 

REPORT  .OF  COMMISSIONERS  WEINSTOCK,  BALLARD,  AND  AISHTON: 

Points  of  dissent 231 

Employers'  objection  to  organized  labor,  fear  of— 

Sympathetic  strikes 235 

Jurisdictional  disputes 236 

Labor  union  politics 237 

Contract  breaking 237 

Restriction  of  output 238 

Prohibition  of  use  of  nonunion-made  tools  and  material 240 

Closed  shop 240 

Contests  for  supremacy  between  rival  unions 242 

Acts  of  violence 242 

Apprenticeship  rules .• 246 

SUPPLEMENTAL  STATEMENT  OF  COMMISSIONER  S.  THRUSTON  BALLARD 249 

III. 

REPORT  OF  COMMISSIONER  JOHN  B.  LENNON  ON  INDUSTRIAL  EDUCATION,  SIGNED  BY  COMMISSIONERS 

LENNON,  O 'CONNELL,  GARRETSON,  BALLARD,  AND  WALSH 253-261 

Demand  for  industrial  education 255 

Control  of  vocational  schools 257 

General  recommendations 258 

Continuation  of  part-time  schools 259 

Teachers 260 

Conclusions 260 

IV. 
ADDITIONAL  FINDINGS  OF  FACT,  CONCLUSIONS,  AND  RECOMMENDATIONS 263-26') 


LETTEE  OF  TEANSMITTAL. 


COMMISSION  ON  INDUSTRIAL  RELATIONS, 

Chicago,  III.,  August  23,  1915. 
To  the  Sixty -fourth  Congress: 

On  behalf  of  the  Commission  on  Industrial  Relations,  I  have  the 
honor  to  transmit  herewith  its  final  report. 

The  assembling  of  facts  in  the  report  of  the  staff  from  the  records 
of  our  public  hearings  and  the  reports  of  investigators,  under  the 
direction  of  Mr.  Basil  M.  Manly,  might  well  be  taken,  in  my  opinion, 
as  a  model  of  efficiency  and  scientific  treatment  by  governmental 
departments. 

The  plan  of  submitting  none  but  undisputed  facts  in  the  final 
report  of  the  commission  has  been  faithfully  adhered  to. 

No  statement  or  conclusion  of  fact  adverse  to  the  attitude  or  in- 
terest of  any  person  or  group  of  persons  is  submitted,  except  as  de- 
clared or  assented  to  by  the  person  or  by  the  individuals  comprising 
the  group  affected.  Thus,  for  perhaps  the  first  time  in  the  history 
of  our  Government,  the  facts  in  relation  to  conditions  in  the  indus- 
tries examined  and  the  relations  inquired  into  are  placed  beyond 
the  realm  of  controversy  and  established  upon  the  solid  and  scientific 
basis  of  ascertained  and  indisputable  fact. 

It  is  believed  that  the  work  of  the  commission  has  been  conducted 
in  a  spirit  of  social  justice  and  an  earnest  desire  to  serve  the  public 
by  bringing  into  the  light  the  facts  regarding  the  industrial  relations 
of  the  country.  For  the  creation  of  this  spirit,  as  well  as  for  an 
earnest  insistence  that  the  education  of  the  public  should  be  the  key- 
note, I  feel  that  full  credit  should  be  accorded  Mr.  George  P.  West, 
and  that  in  addition  thereto  he  should  be  credited  with  the  inspira- 
tion and  planning  of  many  of  the  most  effective  public  hearings  of 
the  commission. 

Respectfully, 

FRANK  P.  WALSH,  Chairman. 


I. 


Report  of  Basil  M.  Manly 

Director  of  Research  and  Investigation 

Embodying  the  Findings  of  Fact,  Conclusions,  and  Recommendations 

of  the  Staff,  based  upon  their  Investigations  and  the 

Testimony  of  Public  Hearings 

SIGNED  BY 

Commissioners  Walsh,  Lennon,  O'Connell,  and  Garretson 

TOGETHER  WITH 

Supplemental  Statements  by  Chairman  Walsh,  Commission- 
ers Garretson,  Lennon,  and  O'Connell 


11 


LETTER  OF  SUBMITTAL. 


CHICAGO,  ILL.,  August  9,  1915. 

To  the  COMMISSION  ON  INDUSTRIAL  RELATIONS  : 

I  have  the  honor  to  submit  herewith  my  report,  which  has  been 
prepared  by  direction  of  the  commission  as  a  summary  and  interpre- 
tation of  the  evidence  contained  in  the  public  hearings  of  the  com- 
mission and  the  reports  of  the  staff,  together  with  suggestions  for 
action  designed  to  remedy  such  evils  and  abuses  as  have  been  de- 
veloped by  investigation. 

In  the  preparation  of  this  report  I  have  directed  my  attention 
primarily  to  the  most  important  question  placed  before  the  commis- 
sion by  Congress,  namely,  "  the  underlying  causes  of  dissatisfaction 
in  the  industrial  situation."  I  have,  however,  attempted  to  cover  as 
adequately  as  possible  all  the  questions  embodied  in  section  4  of 
the  act. 

A  few  words  with  regard  to  the  method  of  preparation  may  be  of 
value :  The  policy  of  the  commission  in  intrusting  certain  important 
subjects  to  the  members  of  the  staff  for  investigation  under  the  gen- 
eral supervision  of  the  director  has  been  continued  throughout.  The 
members  of  the  staff  who  had  charge  of  definite  subjects  have  made 
their  final  reports  embodying  the  results  of  their  investigations  and 
the  pertinent  parts  of  the  testimony  before  the  commission.  These 
reports  have,  as  far  as  possible,  been  accepted  as  the  basis  for  the 
statements  and  recommendations  contained  in  this  report.  It  is  only 
fair,  however,  to  state  that  in  certain  respects  they  have  been  modi- 
fied, largely  as  a  result  of  the  discussion  which  took  place  when  these 
reports  were  presented  to  the  commission  in  tentative  form.  Never- 
theless, in  every  case  the  substance  and  essential  ideas  of  each  in- 
vestigator's report  have  been  retained. 

The  enormous  mass  of  testimony  heard  by  the  commission  has 
been  drawn  upon  freely.  In  using  this  testimony  I  have  iDeen  guided 
by  the  principle  of  quoting  only  statements  made  by  the  party  to 
whom  such  evidence  would  be  unfavorable  or  by  persons  who  were 
clearly  nonpartisan.  For  example,  in  the  criticism  of  the  attitude 
and  actions  of  employers  only  the  testimony  given  by  employers  or 
their  agents  has  been  quoted ;  the  testimony  of  labor  representatives 
being  used  only  to  show  the  attitude  of  the  workers. 

In  addition,  I  have  utilized  to  a  very  large  extent  the  reports  of 
other  governmental  agencies,  not  only  as  sources  of  original  informa- 
tion but  as  a  check  upon  the  statements  and  conclusions  contained 
herein.  In  relation  to  a  few  subjects,  indeed,  the  information  al- 
ready collected  made  it  unnecessary  for  the  commission  to  conduct 
investigations  of  its  own. 

13 


14  EEPOET  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

This  report  should  properly  be  known  as  the  report  of  the  staff, 
except  that,  as  noted  above,  I  feel  it  necessary  to  assume  personal 
responsibility  for  certain  modifications  which  have  been  made  from 
the  original  reports.  I  wish  to  state,  however,  that  I  have  drawn 
most  largely  upon  the  following  reports,  which  are  submitted  here- 
with, with  the  suggestion  that  Congress  be  requested  to  print  them 
as  supplements  to  this  report : x 

W.  JETT  LAUCK: 

Analysis  of  Economic  Causes  of  Unrest. 
EDGAR  SYDENSTRICKER  : 

Labor  Conditions  in  American  Industry. 
CHRISTOPHER  T.  CHENERY: 

The  Telephone  and  Telegraph  Industry. 

Labor  Conditions  in  Porto  Rico, 
MARIE  L.  OBENAUER: 

Women  in  Industry. 

Interstate  Competition. 
GERTRUDE  BARNUM  : 

Enforcement  of  Laws  Regulating  Working  Hours  of  Women  In  Wisconsin. 
GEORGE  P.  WEST: 

Labor  Conditions  in  Colorado. 
WILLIAM  P.  HARVEY  : 

Labor  Conditions  in  the  Black  Hills. 

Labor  Conditions  in  Los  Angeles. 
CHARLES  W.  HOLMAN: 

Preliminary  Report  on  the  Land  Question. 
JOHN  L.  COULTER: 

Agricultural  Labor  and  Tenancy. 
WILLIAM  M.  LEISERSON  : 

Unemployment. 
PETER  A.  SPEEK  : 

Conditions  in  Labor  Camps. 

Labor  Complaints  and  -Claims. 

Migratory  Workers. 
GEORGE  E.  BARNETT: 

Joint  Agreements. 
GEORGE  E.  BASNETT  and  D.  A.  McCABE: 

Mediation  and  Arbitration. 
LEO  WOLMAN: 

Extent  and  Growth  of  Labor  Organizations. 
J.  WALLACE  BRYAN  : 

Trade-Union  Law, 
EDWIN  E.  WITTE: 

Injunctions  in  Labor  Disputes. 
ROBERT  F.  HOXIE  : 

Scientific  Management  and  Labor. 
B.  S.  WARREN: 

Industrial  Conditions  and  the  Public  Health. 
LUKE  GRANT: 

Violence  in  Labor  Disputes  aod  the  Policing  of  Industry. 

The  National   Erectors'  Association  and  the  International  Association  of 

Bridge  and  Structural  Iron  Workers. 
REDMOND  S.  BRENNAN  and  PATRICK  F,  GHX: 

The  Inferior  Courts  and  Police  of  Paterson,  N.  J. 
EDWARD  A.  FITZPATRICK: 

Chinese  Exclusion. 

In  addition  to  those  named  above,  the  following  members  of  the 
staff,  who  have  performed  exceptional  service  and  whose  reports 
have  to  some  extent  been  used  directly,  should  be  mentioned :  Henry 
Wiiithrop  Ballantine,  Charles  B.  Barnes,  Francis  H.  Bird,  E.  H. 

1  These  reports  have  not  heen  printed  with  this  document,  on  the  recommendation  of 
Chairman  Frank  P.  Walsh,  as  stated  in  his  letter  in  Senate  Report  No.  143,  Sixty-fourth 
Congress.  The  reports  on  Labor  Conditions  in  Colorado  and  the  National  Erectors'  Asso- 
ciation were  printed  by  the  commission  itself  in  1915. 


LETTER    OF    SUBMITTAL.  15 

Busiek,  W.  J.  Coyne,  Nelle  B.  Curry,  Alexander  M.  Daly,  F.  S. 
Deibler,  Noel  T.  Dowling,  H.  E.  Hoagland,  Carl  Hookstadt,  B.  F. 
Moore,  Daniel  T.  O'Regan,  M.  O'Sullivan,  Selig  Perlman,  Sumner 
Slichter,  George  L.  Sprague,  and  Inis  Weed. 

Special  mention  should  be  made  also  of  Charles  J.  Stowell  and 
Elizabeth  A.  Hyde,  whose  work  in  research  and  in  the  digesting  of 
testimony  has  been  invaluable. 

—  The  success  of  the  public  hearings  was  due  in  large  measure  to  the 
courage,  tact,  and  good  humor  of  Thomas  J.  Egan,  who  performed 
the  difficult  duties  of  sergeant  at  arms  for  the  commission. 
/  •'  I  wish  to  express  my  appreciation  of  the  generous  cooperation  of 
the  secretary,  Mr.  Lewis  K.  Brown,  upon  whose  executive  ability  and 
tactful  administration  of  the  commission's  affairs  the  work  of  the 
1  staff  in  large  measure  depended.     I  wish  also  to  express  to  the  com- 
,  mission  my  acknowledgment  and  appreciation  of  the  unusual  free- 
dom which  has  been  accorded  me  in  the  administration  of  the  work 
of  research  and  investigation,  and  in  the  conduct   of  the  public 
hearings. 

Respectfully,* 

BASH,  M.  MANLY,  Director. 


FINAL  REPORT  OF  THE  COMMISSION  ON  INDUSTRIAL 
RELATIONS. 


REPORT  OF  BASIL  M.  MANLY,  DIRECTOR  OF  RESEARCH  AND 

INVESTIGATION. 


INTRODUCTION. 

The  question  of  industrial  relations  assigned  by  Congress  to  the 
commission  for  investigation  is  more  fundamental  and  of  greater 
importance  to  the  welfare  of  the  Nation  than  any  other  question  ex- 
cept the  form  of  our  government.  The  only  hope  for  the  solution 
of  the  tremendous  problems  created  by  industrial  relationship  lies 
in  the  effective  use  of  our  democratic  institutions  and  in  the  rapid 
extension  of  the  principles  of  democracy  to  industry. 

The  immediate  effects  of  the  form  and  character  of  industrial  or- 
ganization are,  however,  greater  and  closer  to  the  lives  and  happi- 
ness of  all  classes  of  citizens  than  even  the  form  and  character  of 
our  political  institutions.  The  ordinary  man,  whether  employer 
or  worker,  has  relatively  little  contact  with  the  Government.  If  he 
and  his  family  are  well  fed,  well  housed,  and  well  clothed,  and  if  he 
can  pay  for  the  education  of  his  children,  he  can  exist  even  under 
an  autocratic  monarchy  with  little  concern,  until  some  critical  situa- 
tion develops  in  which  his  own  liberty  is  interfered  with  or  until  he 
is  deprived  of  life  or  property  by  the  overwhelming  power  of  his 
tyrannical  ruler.  But  his  industrial  relations  determine  every  day 
what  he  and  his  family  shall  eat,  what  they  shall  wear,  how  many 
hours  of  his  life  he  shall  labor  and  in  what  surroundings.  Under 
certain  conditions  where  his  individual  or  corporate  employer  owns 
or  controls  the  community  in  which  he  lives,  the  education  of  his 
children,  the  character  and  prices  of  his  food,  clothing,  and  house, 
his  own  actions,  speech,  and  opinions,  and  in  some  cases  even  his 
religion,  are  controlled  and  determined,  in  so  far  as  the  interests  of 
the  employer  make  it  desirable  for  him  to  exercise  such  control. 
Such  conditions  are  established  and  maintained  not  only  through  the 
dictation  of  all  working  conditions  by  the  employer,  but  by  his 
usurpation  or  control  of  the  functions  and  machinery  of  political 
government  in  such  communities. 

In  the  available  time  it  has  been  impossible  to  ascertain  how  gen- 
eral such  conditions  are,  but  it  is  clearly  indicated  by  the  investiga- 
tions that  in  isolated  industrial,  mining,  or  agricultural  communi- 
ties, which  are  owned  or  controlled  by  single  individuals  or  corpora- 
tions, and  in  which  the  employees  are  unorganized,  industrial  feu- 
dalism is  the  rule  rather  than  the  exception. 

38819°— 16 2  17 


18  KEPORT  OP   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

In  such  communities  democratic  government  does  not,  as  a  rule, 
exist,  except  in  name  or  form,  and  as  a  consequence  there  now  exist 
within  the  body  of  our  Republic  industrial  communities  which  are 
virtually  principalities,  oppressive  to  those  dependent  upon  them 
for  a  livelihood  and  a  dreadful  menace  to  the  peace  and  welfare  of 
the  Nation. 

Such  conditions  as  these  are  the  direct  and  inevitable  consequence 
of  the  industrial  relations  which  exist  in  such  communities.  Politi- 
cal freedom  can  exist  only  where  there  is  industrial  freedom ;  politi- 
cal democracy  only  where  there  is  industrial  democracy. 

Such  industrial  democracy  has  been  established  in  a  greater  or 
less  degree  in  certain  American  industries  or  for  certain  classes  of 
employees.  But  .between  conditions  of  industrial  democracy  and 
industrial  feudalism  there  are  almost  infinite  gradations  marking 
the  stages  of  evolution  which  have  been  reached.  In  every  case, 
however,  investigation  has  shown  that  the  degree  of  political  free- 
dom and  democracy  which  exists  is  conditioned  by  the  industrial 
status  of  the  citizens  who  form  the  majority  of  the  community. 

The  problems  of  industrial  relations,  therefore,  demand  the  atten- 
tion of  Congress,  not  only  because  they'  determine  the  life,  security, 
and  happiness  of  the  25,000,000  citizens  of  the  United  States  who 
occupy  the  position  of  wage  earners  but  because  they  affect  for  good 
or  evil  the  government  of  localities  and  States  and  to  a  smaller  de- 
gree that  of  the  Nation  itself.  What  each  of  these  wage  earners  shall 
eat,  what  he  shall  wear,  where  he  shall  live,  and  how  long  and  under 
what  conditions  he  shall  labor  are  determined  by  his  industrial 
status  and  by  his  relation,  individually  or  collectively,  to  the  person 
or  corporation  employing  him.  Similarly  and  almost  as  directly, 
this  relationship  determines  whether  the  machinery  of  government 
shall  be  used  for  or  against  his  welfare ;  whether  his  vote  shall  count 
for  or  against  his  own  interest ;  whether  he  shall  be  tried  by  a  jury 
of  his  peers  or  a  jury  selected  in  collusion  with  the  employing  com- 
pany, or,  under  conditions  of  so-called  martial  law,  by  no  jury  what- 
ever ;  whether,  in  fact,  he  shall  be  a  free  man  or  be  deprived  of  every 
right  guaranteed  by  Federal  and  State  constitutions,  imprisoned 
without  warrant  for  the  commission  of  crimes  of  which  he  may  be 
innocent  or  forcibly  deported  from  the  community  or  State  in  which 
he  has  made  his  home.  For  these  reasons  it  seems  desirable  at  the 
outset  to  suggest  a  recommendation  to  Congress  that  these  problems 
of  industrial  relationship  should  occupy  their  due  prominence  in  the 
deliberations  of  that  honorable  body,  and  that  the  entire  machinery 
of  the  Federal  Government  should  be  utilized  to  the  greatest  possible 
degree  for  the  correction  of  such  deplorable  conditions  as  have  been 
found  to  exist. 

The  lack  of  a  proper  industrial  relationship  and  the  existence  of 
bad  labor  conditions  is  a  matter  of  the  most  serious  moment  during 
times  of  peace,  but  the  events  of  the  past  year  have  demonstrated 
how  enormously  their  menace  to  the  welfare  of  a  nation  is  increased 
during  a  period  of  war.  The  present  European  war  is  being  fought 
on  the  farms  and  in  the  factories  as  much  as  in  the  trenches.  The 
effective  mobilization  of  our  industrial  resources  is  as  important, 
simply  from  the  standpoint  of  war,  as  is  the  mobilization  of  our  mil- 
itary and  naval  forces. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  19 

It  is  equally  important  that  action  should  be  taken  now,  and  not 
after  war  is  a  reality. 

An  attempt  has  been  made  in  the  succeeding  pages  of  this  report 
to  suggest  some  of  the  measures  which  should  be  adopted,  with  a  full 
realization,  however,  that  no  action  will  be  effective  which  does  not 
come  through  an  understanding  by  the  American  people  of  the  essen- 
tial facts  regarding  industrial  conditions.  Practically  there  are  only 
two  alternatives  for  effective  action:  First,  the  creation  of  a  huge 
system  of  bureaucratic  paternalism  such  as  has  been  developed  in 
Germany ;  second,  action  which  removes  the  many  existing  obstacles 
which  prevent  effective  organization  and  cooperation,  reserving  for 
performance  by  the  Government  only  those  services  which  can  not  be 
effectively  conducted  by  voluntary  organizations  and  those  which 
are  of  such  vital  importance  to  the  entire  Nation  that  they  should 
not  be  left  to  the  hazard  of  private  enterprise. 

In  closing  this  introductory  statement  it  is  proper  to  append  a 
quotation  from  Carlyle,  the  great  Scotch  historian,  which  contains 
in  a  few  eloquent  sentences  the  very  heart  of  the  situation  in  Ameri- 
can industry : 

With  the  working  people,  again,  it  is  not  so  well.  Unlucky !  For  there  are 
from  twenty  to  twenty-five  millions  of  them.  Whom,  however,  we  lump  together 
into  a  kind  of  dim  compendious  unity,  *  *  *,  as  "  the  masses."  Masses 
indeed;  and  yet,  singular  to  say,  the  masses  consist  of  units,  *  *  *,  every 
unit  of  whom  has  his  own  heart  and  sorrows ;  stands  covered  there  with  his  own 
skin,  and  if  you  prick  him  he  will  bleed.  Every  unit  of  these  masses  is  a  mirac- 
ulous man,  even  as  thou  thyself  art ;  struggling  with  vision  or  with  blindness  for 
his  infinite  kingdom  (this  life  which  he  has  got  once  only  in  the  middle  of 
eternities)  ;  with  a  spark  of  the  divinity,  what  thou  callest  an  immortal  soul, 
in  him! 

Clearly  a  difficult  "  point "  for  government,  that  of  dealing  with  these  masses ; 
if  indeed  it  be  not  rather  the  sole  point  and  problem  of  government,  and  all 
other  points  mere  accidental  crotchets,  superficialities,  and  beatings  of  the 
wind !  For  let  charter  chests,  use  and  wont,  law  common  and  special,  say  what 
they  will,  the  masses  count  to  so  many  millions  of  units,  made,  to  all  appear- 
ance, by  God,  whose  earth  this  is  declared  to  be. 

METHOD  AND  CHARACTER  OF  INVESTIGATION. 

In  the  investigation  of  questions  so  intimately  affecting  the  lives 
of  a  large  part  of  the  American  people  the  ordinary  methods  of 
compiling  facts  and  drawing  deductions  would  have  been  utterly 
insufficient,  not  only  because  the  ground  to  be  covered  was  too  ex- 
tensive, but  because  the  situation  was  too  largely  the  result  of  the 
opinions,  beliefs,  and  convictions  of  employers  and  employees  to  be 
susceptible  of  ascertainment  by  such  a  method.  Furthermore,  it 
became  clear  very  early  in  the  investigation  that  the  problems  which 
were  presented  could  be  solved  only  by  the  will  arid  conscience  of 
the  American  people  acting  either  directly  or  through  their  repre- 
sentatives in  the  State  and  Federal  Governments. 

The  commission  has  therefore  called  before  it  witnesses  represent- 
ing persons  drawn  from  almost  every  walk  of  life,  whose  knowledge 
and  opinions  were  believed  to  be  of  value.  In  order  that  the  informa- 
tion developed  by  these  hearings  should  reach  the  people  they  were 
not  only  held  in  public,  but,  through  the  newspapers,  the  facts  de- 
veloped by  them  have  been  carried  throughout  the  Nation. 

These  hearings  have  occupied  in  all  154  days,  or  rather  more  than 
the  equivalent  of  6  months  of  the  commission's  time.  One  or  more 


20  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

hearings  were  held  in  each  of  the  following  cities:  Washington, 
New  York,  Paterson,  Philadelphia,  Boston,  Chicago,  Lead  (S.  Dak.)? 
Butte,  Seattle,  Portland,  San  Francisco,  Los  Angeles,  Denver,  and 
Dallas.  The  witnesses,  however,  were  by  no  means  limited  to  these 
localities,  but  in  every  case  the  best-informed  persons  were  brought 
to  the  centers  at  which  the  hearings  were  held. 

The  representative  character  of  the  witnesses  may  best  be  shown  by 
the  statement  on  the  following  page. 

Classification  of  ivitnesses  upon  industrial  subjects. 

Affiliated  with  employers : 

Employers,  managers,  foremen,  etc 

Representatives  of  employers'  organizations — 

Attorneys 15 

Efficiency  engineers 10 

Employment  agents 

Capitalists,  bankers,  directors,  etc 20 

230 

Affiliated  with  labor : 

Trades-union  officials 135 

Workingmen  and  working  women 90 

Attorneys 6 

Industrial  Workers  of  the  World 8 

Representatives  of  the  Socialist  Party G 

245 

Not  affiliated  with  either  group: 

Agriculturists 22 

Attorneys 15 

Public  officials 69 

Representatives  of  civic  organizations 

Educators 22 

Economists  and  sociologists 20 

Investigators 11 

Representatives  of  the  press 14 

Clergy 10 

Physicians 7 

Unclassified 17 

On  Chinese  exclusion 84 

265 

Total 740 

These  witnesses  were  not  arbitrarily  selected  by  the  commission, 
but  were  chosen  only  after  careful  investigation  by  agents  of  the  com- 
mission, who  consulted  the  persons  best  informed  regarding  the 
industry,  locality,  or  question  under  consideration.  Every  oppor- 
tunity was  given  employers  and  employees  to  suggest  the  names  of 
witnesses  who  could  best  present  their  side  of  the  case,  and  the  per- 
sons thus  suggested  were  without  exception  heard  with  absolute  free- 
dom not  only  as  regards  time,  but  without  regard  to  the  technical 
rules  of  evidence. 

It  seems  desirable  also  to  call  attention  to  the  fact  that  in  this 
report,  except  for  citations  from  admittedly  nonpartisan  official 
bodies,  there  are  no  statements  of  fact  affecting  any  person  or  group 
of  persons  which  have  not  been  submitted  to  the  parties  directly 
concerned,  or  which  have  not  been  quoted  from  documents  submitted 
by  them  or  from  their  public  testimony.  The  submission  of  the  facts 
developed  by  preliminary  investigation  to  the  parties  affected  for 
verification  or  correction  at  public  hearings  is  believed  to  be  the  best 
means  of  ascertaining  the  truth  and  avoiding  evasion.  The  same  is 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  21 

true  of  the  recommendations  and  conclusions  contained  in  the  report, 
a  very  large  number  of  which  were  submitted  for  criticism  at  public 
hearings  or  by  correspondence. 

SUMMARY  OF  CONCLUSIONS  AND  RECOMMENDATIONS. 

In  the  act  of  Congress  creating  the  commission,  section  4  named 
11  questions  into  which  inquiry  was  specifically  directed.  Of  these 
questions  three,  relating  to  industrial  conditions,  industrial  relations, 
and  the  causes  of  industrial  unrest,  were  fundamental  in  character 
and  of  broad  scope,  while  eight  were  specific  and  dealt  more  largely 
with  matters  of  detail.  Leaving  these  eight  specific  questions  for 
detailed  consideration  in  the  body  of  the  report,  it  seems  desirable 
to  present  briefly  at  this  point  the  findings  and  conclusions  with  re- 
gard to  these  general  questions. 

LABOR  CONDITIONS  IN  THE  PRINCIPAL  INDUSTRIES,  INCLUDING 

AGRICULTURE. 

In  considering  the  conditions  of  labor  in  American  industries,  it 
has  seemed  that  they  could  be  judged  or  appraised  only  by  com- 
paring conditions  as  they  actually  exist  with  what  knowledge  and 
experience  shows  that  they  might  easily  be  made  during  the  im-> 
mediate  future  if  proper  action  were  taken  to  utilize  the  resources 
of  our  Nation  efficiently  and  distribute  the  products  equitably. 

As  against  this  view  there  has  been  an  attempt  by  some  persons 
to  urge  the  judgment  of  all  things  by  comparison  with  the  past. 
Much  stress  has  been  laid  by  certain  witnesses  upon  the  alleged  im- 
provement of  the  condition  of  the  workers  during  the  past  quarter 
century. 

This  point,  however,  is  regarded  as  generally  immaterial.  The 
crux  of  the  question  rather  is,  Have  the  workers  received  a  fair 
share  of  the  enormous  increase  in  wealth  which  has  taken  place  in 
this  country,  during  the  period,  as  a  result  largely  of  their  labors? 
The  answer  is  emphatically,  No  ! 

The  wealth  of  the  country  between  1890  and  1912  increased  from 
sixty-five  to  one  hundred  and  eighty-seven  billions,  or  188  per  cent, 
whereas  the  aggregate  income  of  wage  earners  in  manufacturing, 
mining,  and  transportation  has  risen  between  1889  and  1909  only  95 
per  cent,  from  two  thousand  five  hundred  and  sixteen  millions  in 
1889  to  four  thousand  nine  hundred  and  sixteen  millions  in  1909. 
Furthermore,  the  wage  earners'  share  of  the  net  product1  of  in- 
dustry in  the  case  of  manufactures  was  only  40.2  per  cent  in  1909, 
as  compared  with  44.9  per  cent  in  1889. 

Similarly,  the  attempt  to  dismiss  deplorable  labor  conditions  in 
the  United  States  by  arguments  that  they  are  better  than  in  Euro- 
pean countries  is  repugnant.  To  say  that  conditions  are  better  than 
in  Great  Britain,  for  example,  is  simply  to  say  that  somewhat  less 
than  one-third  of  the  population  is  in  a  state  of  absolute  poverty, 
for  that  was  the  condition  reported  by  the  latest  British  commission 
It  should  be  a  matter  of  shame  also  to  boast  that  the  condition  of 

1  The  net  product  is  the  value  that  remains  after  subtracting  the  cost  of  materials  from 
the  total  value. 


22  REPORT  OP   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

American  laborers  is  better  than  that  of  laborers  in  the  "  black  bread 
belt "  of  Germany. 

That  conditions  are,  as  a  matter  of  fact,  but  little  better  is  proved 
conclusively  by  the  almost  complete  cessation  of  immigration  from 
Germany,  England,  and  France.  No  better  proof  of  the  miserable 
condition  of  the  mass  of  American  workers  need  be  sought  than  the 
fact  that  in  recent  years  laborers  in  large  numbers  have  come  to 
this  country  only  from  Russia,  Italy,  Austria-Hungary,  and  the 
backward  and  impoverished  nations  of  southern  and  eastern  Europe* 

With  the  inexhaustible  natural  resources  of  the  United  States,  her 
tremendous  mechanical  achievements,  and  the  genius  of  her  people 
for  organization  and  industry,  there  can  be  no  natural  reason  to  pre- 
vent every  able-bodied  man  of  our  present  population  from  being 
well  fed,  well  housed,  comfortably  clothed,  and  from  rearing  a 
family  of  moderate  size  in  comfort,  health,  and  security.  How  far 
this  ideal  is  actually  achieved  is  discussed  in  some  detail  in  the  fol- 
lowing pages. 

It  is  evident  both  from  the  investigations  of  this  commission  and 
from  the  reports  of  all  recent  governmental  bodies  that  a  large  part 
of  our  industrial  population  are,  as  a  result  of  the  combination  of  low 
wages  and  unemployment,  living  in  a  condition  of  actual  poverty. 
How  large  this  proportion  is  can  not  be  exactly  determined,  but  it 
is  certain  that  at  least  one-third  and  possibly  one-half  of  the  families 
of  wage  earners  employed  in  manufacturing  and  mining  earn  in  the 
course  of  the  year  less  than  enough  to  support  them  in  anything  like 
a  comfortable  and  decent  condition.  The  detailed  evidence  is  pre- 
sented in  a  separate  report  which  is  submitted  for  transmittal  to 
Congress.1  At  this  point  it  is  sufficient  to  call  attention  to  the  results 
of  the  most  exhaustive  and  sweeping  official  investigation  of  recent 
years,  that  of  the  Immigration  Commission,  which  reported  to  Con- 
gress in  1909,  This  investigation  secured  detailed  information  re- 
garding the  daily  or  weekly  earnings  of  619,595  employees  of  all 
classes  in  our  basic  manufacturing  industries  and  in  coal  mining, 
and  information  regarding  income  and  living  conditions  for  15,726 
families. 

It  was  found  that  the  incomes  of  almost  two-thirds  of  these  fam- 
ilies (64  per  cent)  were  less  than  $750  per  year  and  of  almost  one- 
third  (31  per  cent)  were  less  than  $500,  the  average  for  all  being 
$721.  The  average  size  of  these  families  was  5.6  members.  Elab- 
orate studies  of  the  cost  of  living  made  in  all  parts  of  the  country 
at  the  same  time  have  shown  that  the  very  least  that  a  family  of  five 
persons  can  live  upon  in  anything  approaching  decency  is  $700.  It  is 
probable  that,  owing  to  the  fact  that  the  families  investigated  by  the 
Immigration  Commission  were,  to  a  large  extent,  foreign  born,  the 
incomes  reported  are  lower  than  the  average  for  the  entire  working 
population ;  nevertheless,  even  when  every  allowance  is  made  for  that 
fact,  the  figures  show  conclusively  that  between  one-half  and  two- 
thirds  of  these  families  were  living  below  the  standards  of  decent 
subsistence,  while  about  one-third  were  living  in  a  state  which  can 
be  described  only  as  abject  poverty. 

American  society  was  founded  and  for  a  long  period  existed  upon 
the  theory  that  the  family  should  derive  its  support  from  the  earn- 

1  Report  of  Edgar  Sydenstricker  :  Labor  Conditions  in  American  Industries. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  23 

ings  of  the  father.  How  far  we  have  departed  from  this  condition 
is  shown  by  the  fact  that  79  per  cent  of  the  fathers  of  these  families 
earned  less  than  $700  per  year.  In  brief,  only  one-fourth  of  these 
fathers  could  have  supported  their  families  on  the  barest  subsist- 
ence level  without  the  earnings  of  other  members  of  the  family  or 
income  from  outside  sources. 

Other  facts  collected  in  this  investigation  show  conclusively  Jbhat 
a  very  large  proportion  of  these  families  did  not  live  in  decency 
and  comfort.  Thirty  per  cent  kept  boarders  and  lodgers,  a  condition 
repugnant  to  every  ideal  of  American  family  life,  especially  in  the 
crowded  tenements  or  tiny  cottages  in  which  the  wage  earners  of 
America  characteristically  live.  Furthermore,  in  77  per  cent  of  the 
families  two  or  more  persons  occupied  each  sleeping  room,  in  37  per 
cent  three  or  more  persons,  and  in  15  per  cent  four  or  more  persons. 

The  most  striking  evidence  of  poverty  is  the  proportion  of  pauper 
burials.  Th  repugnance  of  all  classes  of  wage  earners  of  all  races 
to  pauper  burial  is  such  that  everything  will  be  sacrificed  and  heavy 
debts  incurred  rather  than  permit  any  member  of  the  family  to  lie 
in  the  "  potter's  field  " ;  nevertheless  in  New  York  City  1  out  of  every 
12  corpses  is  buried  at  the  expense  of  the  city  or  turned  over  to 
physicians  for  dissection.1 

The  terrible  effects  of  such  poverty  may  be  outlined  in  a  few  para- 
graphs, but  their  far-reaching  consequences  could  not  be  adequately 
shown  in  a  volume. 

Children  are  the  basis  of  the  State;  as  they  live  or  die,  as  they 
thrive  or  are  ill  nourished,  as  they  are  intelligent  or  ignorant,  so 
fares  the  State.  How  do  the  children  of  American  workers  fare  ? 

It  has  been  proved  by  studies  here  and  abroad  that  there  is  a 
direct  relation  between  poverty  and  the  death  rate  of  babies;  but 
the  frightful  rate  at  which  poverty  kills  was  not  known,  at  least  for 
this  country,  until  very  recently,"  when  through  a  study  made  in 
Johnstown,  Pa.,  by  the  Federal  Children's  Bureau,  it  was  shown  that 
the  babies  whose  fathers  earned  less  than  $10  per  week  died  during 
the  first  year  at  the  appalling  rate  of  256  per  1,000.  On  the  other 
hand,  those  whose  fathers  earned  $25  per  week  or  more  died  at  the 
rate  of  only  84  per  1,000.  The  babies  of  the  poor  died  at  three  times 
the  rate  of  those  who  were  in  fairly  well-to-do  families.  The  tremen- 
dous significance  of  these  figures  will  be  appreciated  when  it  is  known 
that  one- third  of  all  the  adult  workmen  reported  by  the  Immigration 
Commission  earned  less  than  $10  per  week,  even  exclusive  of  time 
lost.  On  the  showing  of  Johnstown  these  workmen  may  expect  one 
out  of  four  of  their  babies  to  die  during  the  first  year  of  life. 

The  last  of  the  family  to  go  hungry  are  the  children,  yet  statistics 
show  that  in  six  of  our  largest  cities  from  12  to  20  per  cent  of  the 
children  are  noticeably  underfed  and  ill  nourished. 

The  minimum  amount  of  education  which  any  child  should  receive 
is  certainly  the  grammar  school  course,  yet  statistics  show  that  only 
one-third  of  the  children  in  our  public  schools  complete  the  grammar 
school  course,  and  less  than  10  per  cent  finish  high  school.2  Those 

1  Statistics  for  New  York  are  the  only  ones  available  which  are  reasonably  complete. 
Even  there  not  all  are  included  who  die  in  a  state  of  extreme  poverty,  as  it  is  well  known 
that  national  societies  and  sympathetic  individuals  claim  a  large  number  of  bodies  of 
persons  absolutely  unknown  to  them. 

8  Elimination  of  Pupils  from  School.  Edward  L.  Thorndike.  Bull.  379,  TJ.  S.  Bureau  of 
Education. 


24  REPORT  OF   COMMISSION   ON"   INDUSTRIAL  RELATIONS. 

who  leave  are  almost  entirely  the  children  of  the  workers,  who,  as 
soon  as  they  reach  working  age,  are  thrown,  immature,  ill  trained, 
and  with  no  practical  knowledge,  into  the  complexities  of  industrial 
life.  In  each  of  four  industrial  towns  studied  by  the  Bureau  of 
Labor  Statistics,  more  than  75  per  cent  of  the  children  quit  school 
before  reaching  the  seventh  grade.1 

Tlje  great  seriousness  of  this  condition  is  even  more  acutely  realized 
when  it  is  known  that  in  the  families  of  the  workers  37  per  cent  of 
the  mothers  are  at  work2  and  consequently  unable  to  give  the  chil- 
dren more  than  scant  attention.  Of  these  mothers  30  per  cent  keep 
boarders  and  lodgers  and  7  per  cent  work  outside  the  home. 

As  a  final  statement  of  the  far-reaching  effects  of  the  economic 
condition  of  American  wage  earners,  it  seems  proper  to  quote  the 
following  statement  of  the  Chicago  Commission  on  Crime,  which 
after  thorough  investigation,  has  reported  during  the  past  year : 

The  pressure  of  economic  conditions  has  an  enormous  influence  in  producing 
certain  types  of  crime.  Insanitary  housing  and  working  conditions,  unemploy- 
ment, wages  inadequate  to  maintain  a  human  standard  of  living,  inevitably 
produce  the  crushed  or  distorted  bodies  and  minds  from  which  the  army  of 
crime  is  recruited.  The  crime  problem  is  not  merely  a  question  of  police  and 
courts;  it  leads  to  the  broader  problems  of  public  sanitation,  education,  home 
care,  a  living  wage,  and  industrial  democracy.8 

The  other  factors  in  the  conditions  under  which  labor  is  employed 
in  American  industry,  such  as  working  hours,  regularity  of  employ- 
ment, safety,  and  sanitation,  are  left  for  later  discussion.  Suffice 
it  to  say  in  this  connection  that  while  in  certain  fields  great  improve- 
ments have  been  made,  the  general  situation  is  such  that  they  accen- 
tuate rather  than  relieve  the  deplorable  effects  of  inadequate  income 
which  have  been  pointed  out. 

As  a  picture  of  American  industry,  this  presentation  is  undeniably 
gloomy  and  depressing,  but  as  a  diagnosis  of  what  is  wrong  with 
American  labor  conditions,  it  is  true  and  exact.  There  are,  of  course, 
many  bright  spots  in  American  industry,  where  workmen  are  well 
paid  and  regularly  employed  under  good  working  conditions  in 
the  determination  of  which  they  have  some  share.  But,  even  as  the 
physician  pays  little  attention  to  the  good  eyes  and  sound  teeth  of 
a  patient  whose  vital  organs  are  diseased,  so  impressive  is  the  urgent 
need  for  attention  to  the  diseased  spots  in  industry,  it  is  felt  to  be 
unnecessary  to  waste  time  in  word  pictures  of  conditions  which  are 
all  right  or  which  may  be  depended  upon  to  right  themselves. 

In  agriculture  there  is  no  array  of  exact  figures  which  can  be  quoted 
to  show  the  condition  of  labor.  But,  speaking  generally, 'the  available 
evidence  indicates  clearly  that  while  in  some  sections  agricultural 
laborers  are  well  paid  and  fairly  treated,  the  condition  of  the  mass  is 
very  much  like  that  of  the  industrial  workers. 

Moreover,  there  is  a  peculiar  condition  in  agriculture  which  merits 
a  brief  but  strong  statement  at  this  point  as  a  preface  to  a  more  de- 
tailed discussion  later.  The  most  alarming  fact  in  American  agri- 
culture is  the  rapid  growth  of  tenancy.  In  1910  there  were  37  tenant - 

1  Conditions  Under  Which  Children  Leave  School  to  Go  to  Work.     Vol.  VII  of  Report  on 
Conditions  of  Woman  and  Child  Wage  Earners  in  the  United  States.     S.  Doc.  No.  645,  61st 
Cong.,  2d  sess. 

2  Summary  Report  on  Immigrants  in  Manufacturing  and  Mining.     Vols.  19  and  20  of 
Reports  of  the  Immigration  Commission.     S.  Doc.  No.  633,  61st  Cong.,  2d  sess. 

»  Report  of  the  City  Council  Committee  on  Crime,  Chicago,  Summary  of  Findings,  sec.  14, 
p.  12. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  25 

operated  farms  in  each  100  farms  in  the  United  States,  as  compared 
with  28  in  1890,  an  increase  of  32  per  cent  during  20  years.  No 
nation-wide  investigation  of  the  condition  of  tenant  farmers  has  ever 
been  made,  but  in  Texas,  where  the  investigations  of  this  commission 
were  thorough  and  conclusive,  it  was  found  not  only  that  the  economic 
condition  of  the  tenant  was  extremely  bad  but  that  he  was  far  from 
being  free,  while  his  future  was  regarded  as  hopeless.  Badly  housed, 
ill  nourished,  uneducated,  and  hopeless,  these  tenants  continue  year 
after  year  to  eke  out  a  bare  living,  moving  frequently  from  one  farm 
to  another  in  the  hope  that  something  will  turn  up.  Without  a  large 
family  the  tenant  can  not^hope  to  succeed  or  break  even,  so  in  each 
tenant  family  numerous  children  are  being  reared  to  a  future  which 
under  present  conditions  will  be  no  better  than  that  of  their  parents, 
if  as  good.  The  wife  of  a  typical  tenant  farmer,  the  mother  of  11 
children,  stated  in  her  testimony  before  the  commission  that  in  addi- 
tion to  the  rearing  of  children,  making  their  clothes,  and  doing  the 
work  of  the  house,  she  always  helped  with  the  crops,  working  up  to 
within  three  or  four  months  before  children  were  born,  and  that 
during  all  the  years  of  her  married  life  she  had  had  no  ready-made 
dresses  and  only  three  hats.  The  investigations  of  this  commission 
in  that  rich  and  generally  prosperous  section  of  the  country  only  con- 
firm and  accentuate  the  statements  of  the  Federal  Industrial  Com- 
mission which  reported  in  1902 : 

The  result  of  this  system  [share  tenancy]  is  that  the  renters  rarely  if  ever 
succeed  in  laying  by  a  surplus.  On  the  contrary,  their  experiences  are  so  dis- 
couraging that  they  seldom  remain  on  the  same  farm  for  more  than  a  year. 
They  are  not  only  unable  to  lay  by  any  money,  but  their  children  remain  un- 
educated and  half  clothed.  The  system  is  apparently  one  of  the  most  undesira- 
ble, so  far  as  its  effect  on  the  community  is  concerned.1 

Similarly,  the  Public  Lands  Commission  reported  in  1905 : 

There  exists  and  is  spreading  in  the  West  a  tenant  or  hired  labor  system 
which  not  only  represents  a  relatively  low  industrial  development,  but  whose 
further  development  carries  with  it  a  most  serious  threat.  Politically,  socially, 
and  economically  this  system  is  indefensible. 

The  condition  of  agricultural  laborers  can  not,  however,  be  dis- 
missed without  referring  to  the  development  of  huge  estates  which 
are  operated  by  managers  with  hired  labor  on  what  may  properly 
be  called  a  "  factory  system."  The  conditions  upon  such  estates  are 
deplorable,  not  only  because  of  the  extremely  low  wages  paid  (80 
cents  per  day  in  the  case  of  one  which  was  carefully  investigated), 
but  even  more  because  these  estates,  embracing  within  their  bound- 
aries entire  counties  and  towns,  are  a  law  unto  themselves  and  the 
absolute  dictators  of  the  lives,  liberties,  and  happiness  of  their  em- 
ployees. It  is  industrial  feudalism  in  an  extreme  form.  Such  estates 
are,  as  a  rule,  the  property  of  absentee  landlords,  who  are  for  the 
most  part  millionaires,  resident  in  the  eastern  States  or  in  Europe. 

EXISTING  RELATIONS  BETWEEN  EMPLOYERS  AND  EMPLOYEES. 

Considering  the  whole  field  of  American  industry,  there  are  almost 
infinite  variations  of  relationship  between  employers  and  employees, 
ranging  from  the  individual  worker  hired  by  a  single  employer,  as 

1  Reports  of  the  Industrial  Commission,  Vol.  XIX,  1902,  p.  98. 


26  REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

in  domestic  service  and  agriculture,  to  the  huge  corporation  with 
a  hundred  thousand  stockholders  and  a  quarter  of  a  million  em- 
ployees. Relationship  varies  from  that  of  direct  contact  to  a  situa- 
tion where  the  employee,  together  with  thousands  of  his  fellow 
workers,  is  separated  by  hundreds  of  miles  from  the  individuals 
who  finally  control  his  employment  and  of  whose  existence  he  is 
usually  entirely  ignorant. 

A  thorough  discussion  of  the  relationships  which  exist  under  these 
various  forms  of  industrial  organization  would  be  not  only  tedious, 
but  useless  for  all  practical  purposes.  The  typical  form  of  industrial 
organization  is  the  corporation.  In  transportation  approximately 
100  per  cent  of  the  wage  earners  are  employed  by  corporations;  in 
mining,  90  per  cent;  and  in  manufacturing,  75  per  cent.  Moreover, 
it  is  under  this  form  that  the  great  problems  of  industrial  relations 
have  developed. 

The  actual  relationship  which  exists  between  employers  and  em- 
ployees under  the  artificial  conditions  which  characterize  the  cor- 
porate form  of  organization  can  not  be  understood  without  an 
analysis  of  the  powers,  functions,  and  responsibilities  of  the  different 
elements  which  go  to  make  up  the  typical  corporation.  The  actual 
ownership  of  a  corporation  is  vested  in  the  stockholders  and  bond- 
holders, whose  only  interest  in  the  industry  is  represented  by  cer- 
tificates upon  the  basis  of  which  they  expect  the  payment  of  interest 
or  dividends  at  stated  intervals. 

The  control  of  the  property,  as  far  as  operation  is  concerned,  rests 
finally  with  the  stockholders,  or  with  some  particular  class  of 
stockholders  whose  shares  entitle  them  to  vote.  The  stockholders, 
however,  act  through  the  board  of  directors,  who  are  usually  elected 
in  such  a  way  that  they  represent  only  the  dominant  interest.1  As 
far  as  the  organization  of  the  corporation  is  concerned,  the  prin- 
cipal function  of  the  board  of  directors  is  to  select  the  executive 
officials.  These  executive  officials,  either  directly  or  indirectly,  select 
the  numerous  superintendents,  foremen,  and  petty  bosses  by  whom 
the  direct  operation  of  the  enterprise  is  managed  and  through  whom 
all  the  workers  are  hired,  discharged,  and  disciplined. 

This  is  a  skeleton  of  corporate  organization.  To  understand  its 
operations  it  is  necessary  to  examine  the  functions  and  responsibili- 
ties of  the  different  parts  of  the  organization. 

Theoretically  and  legally,  the  final  control  and  responsibility  rests 
with  the  stockholders,  but  in  actual  practice  a  very  different  situa- 
tion is  found.  The  relationship  of  stockholders  to  a  corporation  is 
anything  but  permanent :  in  a  busy  week  on  Wall  Street  the  number 
of  shares  bought  and  sold  in  one  of  the  great  corporations  will 
greatly  exceed  the  total  number  of  shares  that  are  in  existence.  The 
stockholders  as  a  class,  therefore,  have  no  guiding  interests  in  the 
permanent  efficiency  of  the  corporation  as  regards  either  the  preser- 
vation of  its  physical  property  or  the  maintenance  of  an  efficient 
productive  organization.  Stocks  are  bought  either  as  a  speculation 
or  as  an  investment,  and  in  case  either  the  physical  property  deteri- 
orates or  the  productive  organization  tends  to  become  inefficient,  the 
well-informed  stockholder  generally  takes  no  steps  to  correct  the 

1  See  the  testimony  of  Mr.  Jacob  H.  Schiff,  Mr.  Samuel  Untermyer,  and  others  upon  thU 
point. 


REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  27 

condition,  but  merely  throws  his  stock  upon  the  market.  This  marks 
a  very  real  and  definite  distinction  from  the  actual  ownership  of  a 
property  or  business  which  must  be  kept  in  good  condition  by  its 
owner  as  regards  b8th  plant  and  organization.  If  all  industries  were 
owned  and  operated  by  individuals,  there  might  be  some  reason  to 
hope  that  generally  satisfactory  wages  and  physical  conditions  might 
be  attained  through  the  education  of  the  owner  to  a  realization 
th#t  permanent  success  depended  absolutely  upon  the  maintenance 
of  the  plant  in  the  best  condition  and  the  permanent  satisfaction  of 
the  legitimate  demands  of  the  workers,  but  with  the  impersonal,  re- 
mote, and  irresponsible  status  of  control  by  stock  ownership,  such 
a  hope  must  be  purely  illusory.  The  ordinary  stockholder  in  a 
large  corporation  actually  occupies  a  less  direct  relationship  to  the 
corporation  in  which  he  is  interested,  has  less  knowledge  of  its  actual 
operations,  and  less  control  over  its  management  than  the  ordinary 
citizen  has  over  local,  State,  and  National  Governments. 

Boards  of  directors  in  theory  are  responsible  for  and  would  natur- 
ally be  expected  to  maintain  supervision  over  every  phase  of  the 
corporation's  management,  but,  as  a  matter  of  fact,  we  know  that 
such  supervision  is  maintained  only  over  the  financial  phase  of  the 
business,  controlling  the  acquisition  of  money  to  operate  the  busi- 
ness and  distributing  the  profits.  Actual  direction  generally  exists 
only  through  the  removal  of  executive  officials  who  fail  to  deliver  the 
expected  profits,  and  through  the  appointment  of  their  successors.1 

Upon  the  testimony  of  financiers  representing,  as  directors,  hun- 
dreds of  corporations,  the  typical  director  of  large  corporations  is  not 
only  totally  ignorant  of  the  actual  operations  of  such  corporations, 
whose  properties  he  seldom,  if  ever,  visits,  but  feels  and  exercises  no 
responsibility  for  anything  beyond  the  financial  condition  and  the 
selection  of  executive  officials.  Upon  their  own  statements,  these 
directors  know  nothing  and  care  nothing  about  the  quality  of  the 
product,  the  condition  and  treatment  of  the  workers  from  whose 
labor  they  derive  their  income,  nor  the  general  management  of  the 
business.2 

As  far  as  operation  and  actual  management  are  concerned,  the 
executive  officials  are  practically  supreme.  Upon  their  orders  pro- 
duction is  increased  or  decreased,  plants  are  operated  or  shut  down, 
and  upon  their  recommendations  wages  are  raised  or  lowered.  But 
even  they  have  little  direct  contact  with  the  actual  establishment  of 
working  conditions,  and  no  relation  at  all  with  the  rank  and  file  of 
the  workers.  They  act  upon  the  recommendations  of  superintend- 
ents, whose  information  comes  from  their  assistants  and  foremen,  and 
from  the  elaborate  statistics  of  modern  business,  which  account  for 
every  piece  of  material  and  product,  show  the  disposition  of  every 
penny  that  comes  and  goes,  but  ignore  as  though  they  did  not  exist 
the  men  and  women  whose  labor  drives  the  whole  mechanism  of 
business. 

Here,  then,  is  the  field  of  industrial  relations:  Masses  of  workers 
on  the  one  side  dealing  in  some  manner  with  foremen  and  super- 
intendents on  the  other,  behind  whom  is  an  organization  of  execu- 

1  See  especially  the  testimony  of  Messrs.  J.  P.  Morgan,  John  D.  Rockefeller,  jr.,  and 
August  Belinont  upon  this  point. 

*  See  the  testimony  of  Messrs.  Jacob  H.  Schiff,  Daniel  Guggenheim,  Roger  W.  Babson, 
and  John  D.  Rockefeller,  jr. 


28  REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

tive  officials,  representing  in  turn  the  board  of  directors,  who  are  the 
chosen  representatives  of  the  stockholders. 

The  crux  of  the  whole  question  of  industrial  relations  is:  Shall 
the  workers  for  the  protection  of  their  interests  be  organized  and 
represented  collectively  by  their  chosen  delegates,  even  as  the  stock- 
holders are  represented  by  their  directors  and  by  the  various  grades 
of  executive  officials  and  bosses? 

In  considering  this  issue  the  first  question  that  presents  itself  is, 
Why  should  such  representation  be  demanded  as  a  necessity?  Not 
only  are  the  executive  officials,  superintendents  and  bosses,  some  wit- 
nesses have  urged  before  the  commission,  for  the  most  part  humane 
and  well-intentioned  men,  but  they  know  that  the  interests  of  the 
business  depend  upon  the  welfare  of  the  workers  and,  if  unhindered, 
will  pay  the  best  wages  and  create  the  best  working  conditions  that 
the  business  can  afford.  Organization  and  representation  are  there- 
fore argued  to  be  unnecessary  and  tending  only  to  promote  friction 
and  interfere  with  the  management  of  the  business. 

Let  us  grant  the  high  character  and  good  intentions  of  officials 
and  consider  the  statement  of  the  workers  in  reply. 

They  say  that  in  modern  corporate  business  the  actions  of  officials 
are  governed  not  by  their  personal  intentions,  but  by  the  inexorable 
demands  for  interest  and  dividends,  and  are  driven  not  by  their  de- 
sire to  create  a  permanently  successful  business  with  a  contented 
labor  force,  but  by  the  never-relaxed  spur  of  the  comparative  cost 
sheet.  The  constant  demand  is  for  high  production  at  low  cost,  not 
through  improvements  and  good  conditions  which  might  give  them 
next  year,  but  this  very  month.  In  the  high  pressure  of  business 
every  superintendent  knows  that  if  his  plant  is  at  the  bottom  of  the 
comparative  scale  for  two  months  his  position  topples,  and  if  for 
three  months  it  is  virtually  gone.  He  can  not  afford  to  experiment 
with  changes  that  will  not  give  immediate  results.  If  he  were  his 
own  master  he  might  take  a  chance,  knowing  that  the  loss  of  this 
year  would  be  compensated  by  gains  under  better  conditions  next 
year,  but  the  monthly  cost  sheet  does  not  wait  for  next  year;  it  de- 
mands results  now. 

But  it  may  be  said  that  if  he  can  not  improve  conditions  himself 
he  can  at  least  recommend  them  to  his  superiors,  to  be  transmitted 
to  the  board  of  directors  for  approval.  This  might  indeed  be  done, 
and  with  the  extension  of  an  understanding  among  managers  that  low- 
production  costs  may  be  secured  with  high  wages,  probably  would  be  to 
an  increasing  extent,  except  that  boards  of  directors  scorn  such  ab- 
stractions as  the  high-wage-low-cost  theory  and  habitually  insist  that 
managers  shall  buy  labor,  as  they  buy  material,  in  the  cheapest  mar- 
ket. Moreover,  raising  wages  is  traditionally  unpopular  among 
stockholders  and  directors,  and  recommendations  for  better  condi- 
tions, particularly  if  they  involve  new  capital,  are  frowned  upon.1 
Neither  the  stockholders  nor  the  directors  have  to  live  on  wages  or 
work  in  the  existing  surroundings,  and  profits  deferred  are  con- 
sidered profits  lost. 

The  workers,  therefore,  deny  the  potency  of  even  good  intentions 
on  the  part  of  managers  and  point  to  labor  history,  which  they 

1  See  the  discussion  in  the  1915  stockholders'  meeting  of  the  United  States  Steel  Corpo- 
ration which  was  devoted  almost  exclusively  to  the  question  whether  the  corporation,  at  an 
expense  of  a  few  thousand  dollars,  should  continue  to  send  a  copy  of  the  annual  report  to 
each  stockholder  of  record. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  29 

allege  shows  that  at  best  only  isolated  cases  can  be  pointed  out 
where  marked  improvements  have  taken  place  except  in  response  to 
repeated  demands  from  the  workers  or  to  forestall  the  growth  of 
threatened  organization.  They  point  also  to  such  facts  as  that  chil- 
dren of  12  years  or  younger  were  not  only  employed  in  the  factories 
(as  they  still  are  in  some  States  where  there  has  been  little  aggressive 
agitation),  but  almost  without  exception  were  insisted  upon  by  the 
employers  as  a  necessity. 

The  evidence  of  this  character,  which  is  summarized  elsewhere, 
seems  to  be  conclusive  of  the  necessity  for  organization  and  repre- 
sentation under  modern  business  conditions.  But  even  if  it  were  not 
necessary  it  is  difficult  to  see  any  reason  why  what  is  demanded  and 
required  by  stockholders  should  be  denied  to  workers.  It  would  be 
as  illogical  for  stockholders  individually  to  attempt  to  deal  with  the 
representatives  of  the  unions  as  it  is  for  the  individual  worker  to 
attempt  to  deal  with  executive  officials  representing  the  organized 
stockholders. 

CAUSES  OF  INDUSTRIAL  UNREST. 

It  is  presumed  that  Congress  had  in  mind,  in  directing  the  commis- 
sion to  inquire  into  the  "causes  of  dissatisfaction  in  the  industrial 
situation,"  something  far  different  from  that  "  dissatisfaction  with 
the  present  which  is  the  hope  of  the  future,"  that  desire  for  better 
things  which  drives  men  forever  forward.  Such  dissatisfaction  is 
the  mainspring  of  all  progress  and  is  to  be  desired  in  every  nation 
in  all  walks  of  life. 

It  is  believed  that  Congress  intended  the  inquiry  to  be  directed  to 
that  unrest  and  dissatisfaction  which  grows  out  of  the  existence  of 
intolerable  industrial  conditions  and  which,  if  unrelieved,  will  in  the 
natural  course  of  events  rise  into  active  revolt  or,  if  forcibly  sup- 
pressed, sink  into  sullen  hatred. 

Of  the  existence  of  such  unrest  ample  evidence  has  been  found. 
It  is  the  basis  of  the  establishment  and  growth  of  the  I.  W.  W.,  whose 
card-carrying  members  number  only  a  few  thousands,  but  which  as 
"  a  spirit  and  a  vocabulary  "  permeates  to  a  large  extent  enormous 
masses  of  workers,  particularly  among  the  unskilled  and  migratory 
laborers.  But  entirely  apart  from  those  who  accept  its  philosophy 
and  creed,  there  are  numberless  thousands  of  workers,  skilled  and 
unskilled,  organized  and  unorganized,  who  feel  bitterly  that  they 
and  their  fellows  are  being  denied  justice,  economically,  politically, 
and  legally.  Just  how  widespread  this  feeling  is  or  whether  there 
is  imminent  danger  of  a  quickening  into  active,  nation-wide  revolt, 
none  can  say.  But  no  one  who  reads  the  papers  from  which  the 
workers  get  their  ideas  and  inspiration ;  no  one  who  has  studied  with 
care  the  history  of  such  strikes  as  those  at  Lawrence  and  Paterson, 
in  West  Virginia  and  Colorado,  and  has  understood  the  temper  of 
the  strikers ;  no  one  who  has  associated  with  large  numbers  of  work- 
ers in  any  part  of  the  country,  can  fail  to  be  impressed  by  the  gravity 
of  the  situation. , 

This  sense  of  tension  and  impending  danger  has  been  expressed  by 
numerous  witnesses  before  the  commission,  but  by  none  more  forcibly 
than  by  Mr.  Daniel  Guggenheim,  a  capitalist  whose  interests  in  mines 
and  industrial  plants  extend  to  every  part  of  the  country. 


30  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

Chairman  WALSH.  What  do  you  think  has  been  accomplished  by  the  philan- 
thropic activities  of  the  country  in  reducing  suffering  and  want  among  the 
people? 

Mr.  GUGGENHEIM.  There  has  a  great  deal  been  done.  If  it  were  not  for  what 
has  been  done  and  what  is  being  done,  we  would  have  revolution  in  this 
country. 

The  sources  from  which  this  unrest  springs  are,  when  stated  in  full 
detail,  almost  numberless.  But  upon  careful  analysis  of  their  real 
character  they  will  be  found  to  group  themselves  almost  without 
exception  under  four  main  sources  which  include  all  the  others. 
The  four  are : 

1.  Unjust  distribution  of  wealth  and  income. 

2.  Unemployment  and  denial  of  an  opportunity  to  earn  a  living. 

3.  Denial  of  justice  in  the  creation,  in  the  adjudication,  and  in 
the  administration  of  law. 

4.  Denial  of  the  right  and  opportunity  to  form  effective  organi- 
zations. 

1.    UNJUST  DISTRIBUTION    OF  WEALTH   AND   INCOME. 

The  conviction  that  the  wealth  of  the  country  and  the  income 
which  is  produced  through  the  toil  of  the  workers  is  distributed 
without  regard  to  any  standard  of  justice  is  as  widespread  as  it  is 
deep-seated.  It  is  found  among  all  classes  of  workers  and  takes  every 
form  from  the  dumb  resentment  of  the  day  laborer,  who,  at  the  end  of 
a  week's  back-breaking  toil  finds  that  he  has  less  than  enough  to  feed 
his  family  while  others  who  have  done  nothing  live  in  ease,  to  the 
elaborate  philosophy  of  the  "  soap-box  orator,"  who  can  quote  statistics 
unendingly  to  demonstrate  his  contentions.  At  bottom,  though, 
there  is  the  one  fundamental,  controlling  idea  that  income  should  be 
received  for  service  and  for  service  only,  whereas,  in  fact,  it  bears 
no  such  relation,  rand  he  who  serves  least,  or  not  at  all,  may  receive 
most. 

This  idea  has  never  been  expressed  more  clearly  than  in  the  testi- 
mony of  Mr.  John  H.  Walker,  president  of  the  Illinois  State  Fed- 
eration of  Labor : 

-  A  workingman  is  not  supposed  to  ask  anything  more  than  a  fair  day's  wage 
for  a  fair  day's  work ;  he  is  supposed  to  work  until  he  is  pretty  fairly  tuckered 
out,  say  eight  hours,  and  when  he  does  a  fair  day's  work  he  is  not  supposed 
to  ask  for  any  more  wages  than  enough  to  support  his  family,  while  with  the 
business  man  the  amount  of  labor  furnishes  no  criterion  for  the  amount  they 
receive.  People  accept  it  as  all  right  if  they  do  not  do  any  work  at  all,  and 
accept  it  as  all  right  that  they  get  as  much  money  as  they  can;  in  fact,  they 
are  given  credit  for  getting  the  greatest  amount  of  money  with  the  least 
amount  of  work;  and  those  things  that  are  being  accepted  by  the  other  side 
as  the  things  that  govern  in  every-day  life,  and  as  being  right,  have  brought 
about  this  condition,  this  being  in  my  judgment  absolutely  unfair;  that  is, 
on  the  merits  of  the  proposition  in  dealing  with  the  workers. 

The  workers  feel  this,  some  unconsciously  and  some  consciously,  but  all  of 
them  feel  it,  and  it  makes  for  unrest,  in  my  judgment,  and  there  can  be  no  peace 
while  that  condition  obtains. 

In  the  highest  paid  occupations  among  wage  earners,  such  as 
railroad  engineers  and  conductors,  glass  blowers,  certain  steel-mill 
employees,  and  a  few  of  the  building  trades,  the  incomes  will  range 
from  $1,500  to  $2,000  at  best,  ignoring  a  few  exceptional  men  who 
are  paid  for  personal  qualities.  Such  an  income  means,  under  pres- 
ent-day conditions,  a  fair  living  for  a  family  of  moderate  size,  edu- 
cation of  the  children  through  high  school,  a  small  insurance  policy, 


REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  31 

a  bit  put  by  for  a  rainy  day — and  nothing  more.  With  unusual  re- 
sponsibilities or  misfortunes,  it  is  too  little,  and  the  pinch  of  neces- 
sity is  keenly  felt.  To  attain  such  wages,  moreover,  means  that  the 
worker  must  be  far  above  the  average,  either  in  skill,  physical 
strength,  or  reliability.  He  must  also  have  served  an  apprenticeship 
equal  in  length  to  a  professional  course.  Finally,  and  most  im- 
portant, he  or  his  predecessors  in  the  trade  must  have  waged  a  long, 
aggressive  fight  for  better  wages,  for  there  are  other  occupations 
whose  demand  for  skill,  strength,  and  reliability  are  almost  as  great 
as  those  mentioned,  where  the  wages  are  very  much  less. 

These  occupations,  however,  include  but  a  handful  compared  to 
the  mass  of  the  workers.  What  do  the  millions  get  for  their  toil, 
for  their  skill,  for  the  risk  of  life  and  limb?  That  is  the  question 
to  be  faced  in  an  industrial  nation,  for  these  millions  are  the  back- 
bone and  sinew  of  the  State,  in  peace  or  in  war. 

First,  with  regard  to  the  adult  workmen,  the  fathers  and  potential 
fathers,  from  whose  earnings,  according  to  the  "  American  standard," 
the  support  of  the  family  is  supposed  to  be  derived. 

Between  one-fourth  and  one-third  of  the  male  workers  18  years 
of  age  and  over,  in  factories  and  mines,  earn  less  than  $10  per  week ; 
from  two-thirds  to  three-fourths  earn  less  than  $15,  and  only  about 
one-tenth  earn  more  than  $20  a  week.  This  does  not  take  into  con- 
sideration lost  working  time  for  any  cause. 

Next  are  the  women,  the  most  portentously  growing  factor  in  the 
labor  force,  whose  wages  are  important,  not  only  for  their  own  sup- 
port or  as  the  supplement  of  the  meager  earnings  of  their  fathers 
und  husbands,  but  because,  through  the  force  of  competition  in  a 
rapidly  extending  field,  they  threaten  the  whole  basis  of  the  wage 
scale.  From  two-thirds  to  three-fourths  of  the  women  workers  in 
factories,  stores  and  laundries,  and  in  industrial  occupations  gen- 
erally, work  at  wages  of  less  than  $8  a  week.  Approximately  one- 
fifth  earn  less  than  $4  and  nearly  one-half  earn  less  than  $6  a  week. 

Six  dollars  a  week — what  does  it  mean  to  many?  Three  theater 
ticketSj  gasoline  for  the  week,  or  the  price  of  a  dinner  for  two;  a 
pair  of  shoes,  three  pairs  of  gloves,  or  the  cost  of  an  evening  at 
bridge.  To  the  girl  it  means  that  every  penny  must  be  counted, 
every  normal  desire  stifled,  and  each  basic  necessity  of  life  barely 
satisfied  by  the  sacrifice  of  some  other  necessity.  If  more  food  must 
be  had  than  is  given  with  15-cent  dinners,  it  must  be  bought  with 
what  should  go  for  clothes ;  if  there  is  need  for  a  new  waist  to  replace 
the  old  one  at  which  the  forewoman  has  glanced  reproachfully  or  at 
which  the  girls  have  giggled,  there  can  be  no  lunches  for  a  week  and 
dinners  must  cost  5  cents  less  each  day.  Always  too  the  room  must 
be  paid  for,  and  back  of  it  lies  the  certainty  that  with  slack  seasons 
will  come  lay-offs  and  discharges.  If  the  breaking  point  has  come, 
and  she  must  have  some  amusement,  where  can  it  come  from?  Surely 
not  out  of  $6  a  week. 

Last  of  all  are  the  children,  for  whose  petty  addition  to  the  stream 
of  production  the  Nation  is  paying  a  heavy  toll  in  ignorance,  deformity 
of  body  or  mind,  and  premature  old  age.  After  all,  does  it  matter 
much  what  they  are  paid?  For  all  experience  has  shown  that  in 
the  end  the  father's  wages  are  reduced  by  about  the  amount  that 
the  children  earn.  This  is  the  so-called  "  family  wage,"  and  examin- 
ation of  the  wages  in  different  industries  corroborates  the  theory 


32  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

that  in  those  industries,  such  as  textiles,  where  women  and  children 
can  be  largely  utilized,  the  wages  of  men  are  extremely  low. 

The  competitive  effect  of  the  employment  of  women  and  children 
upon  the  wages  of  men,  can  scarcely  be  overestimated.  Surely  it  is 
hard  enough  to  be  forced  to  put  children  to  work,  without  having 
to  see  the  wages  of  men  held  down  by  their  employment. 

This  is  the  condition  at  one  end  of  the  social  scale.  What  is  at 
the  other? 

Massed  in  millions,  at  the  other  end  of  the  social  scale,  are  fortunes 
of  a  size  never  before  dreamed  of,  whose  very  owners  do  not  know  the 
extent  nor,  without  the  aid  of  an  intelligent  clerk,  even  the  sources  of 
their  incomes.  Incapable  of  being  spent  in  any  legitimate  manner, 
these  fortunes  are  burdens,  which  can  only  be  squandered,  hoarded, 
put  into  so-called  "  benefactions  "  which,  for  the  most  part,  constitute 
a  menace  to  the  State,  or  put  back  into  the  industrial  machine  to  pile 
up  ever-increasing  mountains  of  gold. 

In  many  cases,  no  doubt,  these  huge  fortunes  have  come,  in  whole 
or  in  part,  as  the  rich  reward  of  exceptional  service.  None  would 
deny  or  envy  him  who  has  performed  such  service  the  richest  of  re- 
wards, although  one  may  question  the  ideals  of  a  Nation  which  re- 
wards exceptional  service  only  by  burdensome  fortunes.  But  such 
reward  can  be  claimed  as  a  right  only  by  those  who  have  per- 
formed service,  not  by  those  who  through  relationship  or  mere  para- 
sitism chance  to  be  designated  as  heirs.  Legal  right,  of  course,  they 
have  by  virtue  of  the  law  of  inheritance,  which,  however,  runs  counter 
to  the  whole  theory  of  American  society,  and  which  was  adopted, 
with  important  variations,  from  the  English  law,  without  any  con- 
ception of  its  ultimate  results  and  apparently  with  the  idea  that  it 
would  prevent  exactly  the  condition  which  has  arisen.  In  effect  the 
American  law  of  inheritance  is  as  efficient  for  the  establishment  and 
maintenance  of  families  as  is  the  English  law,  which  has  bulwarked 
the  British  aristocracy  through  the  centuries.  Every  year,  indeed, 
sees  this  tendency  increase,  as  the  creation  of  "  estates  in  trust " 
secures  the  ends  which  might  be  more  simply  reached  if  there  were 
no  prohibition  of  "  entail."  According  to  the  income-tax  returns  for 
10  months  of  1914,  there  are  in  the  United  States  1,598  fortunes  yield- 
ing an  income  of  $100,000  or  more  per  year.  Practically  all  of  these 
fortunes  are  so  invested  and  hedged  about  with  restrictions  upon 
expenditure  that  they  are,  to  all  intents  and  purposes,  perpetuities. 

An  analysis  of  50  of  the  largest  American  fortunes  shows  that 
nearly  one-half  have  already  passed  to  the  control  of  heirs  or  to 
trustees  (their  vice  regents)  and  that  the  remainder  will  pass  to  the 
control  of  heirs  within  20  years,  upon  the  deaths  of  the  "  founders." 
Already,  indeed,  these  founders  have  almost  without  exception  re- 
tired from  active  service,  leaving  the  management  ostensibly  to  their 
heirs  but  actually  to  executive  officials  upon  salary. 

We  have,  according  to  the  income-tax  returns,  44  families  with 
incomes  of  $1,000,000  or  more,1  whose  members  perform  little  or  no 
useful  service,  but  whose  aggregate  incomes,  totaling  at  the  very 
least  $50,000,000  per  year,  are  equivalent  to  the  earnings  of  100,000 
wage  earners  at  the  average  rate  of  $500. 

The  ownership  of  wealth  in  the  United  States  has  become  concen- 
trated to  a  degree  which  is  difficult  to  grasp.  The  recently  published 

1  The  income  tax  statistics,  as  a  matter  of  fact,  cover  only  a  period  of  10  months  in  1914. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  33 

researches  of  a  statistician  of  conservative  views1  have  shown  that 
as  nearly  as  can  be  estimated  the  distribution  of  wealth  in  the  United 
States  is  as  follows: 

The  "  rich,"  2  per  cent  of  the  people,  own  60  per  cent  of  the  wealth. 

The  "  middle  class,"  33  per  cent  of  the  people,  own  35  per  cent  of 
the  wealth. 

The  "poor,"  65  per  cent  of  the  people,  own  5  per  cent  of  the  wealth. 

This  means  in  brief  that  a  little  less  than  2,000,000  people,  who 
would  make  up  a  city  smaller  than  Chicago,  own  20  per  cent  more 
of  the  Nation's  wealth  than  all  the  other  90,000,000. 

The  figures  also  show  that  with  a  reasonably  equitable  division  of 
wealth,  the  entire  population  should  occupy  the  position'  of  comfort 
and  security  which  we  characterize  as  middle  class. 

The  actual  concentration  has,  however,  been  carried  very  much 
further  than  these  figures  indicate.  The  largest  private  fortune  in 
the  United  States,  estimated  at  $1,000,000,000,  is  equivalent  to  the 
aggregate  wealth  of  2,500,000 ^ of  those  who  are  classed  as  "poor," 
who  are  shown  in  the  studies  cited  to  own  on  the  average  about  $400 
each. 

Between  the  two  extremes  of  superfluity'  and  poverty  is  the  large 
middle  class — farmers,  manufacturers,  merchants,  professional  men, 
skilled  artisans,  and  salaried  officials — whose  incomes  are  more  or 
less  adequate  for  their  legitimate  needs  and  desires,  and  who  are 
rewarded  more  or  less  exactly  in  proportion  to  service.  They  have 
problems  to  meet  in  adjusting  expenses  to  income,  but  the  pinch  of 
want  and  hunger  is  not  felt,  nor  is  there  the  deadening,  devitalizing 
effect  of  superfluous,  unearned  wealth. 

From  top  to  bottom  of  society,  however,  in  all  grades  of  incomes, 
are  innumerable  number  of  parasites  of  every  conceivable  type. 
They  perform  no  useful  service,  but  drain  off  from  the  income  of  the 
producers  a  sum  whose  total  can  not  be  estimated. 

This  whole  situation  has  never  been  more  accurately  described 
than  by  Hon.  David  Lloyd-George  in  an  address  on  "  Social  waste  " : 

I  have  recently  had  to  pay  some  attention  to  the  affairs  of  the  Sudan,  in 
connection  with  some  projects  that  have  been  mooted  for  irrigation  and  develop- 
ment in  that  wonderful  country.  I  will  tell  you  what  the  problem  is — you  may 
know  it  already.  Here  you  have  a  great,  broad,  rich  river  upon  which  both  the 
Sudan  and  Egypt  depend  for  their  fertility.  There  is  enough  water  in  it  to 
fertilize  every  part  of  both  countries;  but  if,  for  some  reason  or  other,  the 
water  is  wasted  in  the  upper  regions,  the  whole  land  suffers  sterility  and 
famine.  There  is  a  large  region  in  the  upper  Sudan  where  the  water  has  been 
absorbed  by  one  tract  of  country,  which,  by  this  process,  has  been  converted 
into  a  morass,  breeding  nothing  but  pestilence.  Properly  and  fairly  husbanded, 
distributed,  and  used,  there  is  enough  to  fertilize  the  most  barren  valley  arid 
make  the  whole  wilderness  blossom  like  the  rose. 

That  represents  the  problem  of  civilization,  not  merely  in  this  country  but  in 
all  lands.  Some  men  get  their  fair  share  of  wealth  in  a  land  and  no  more — 
sometimes  even  the  streams  of  wealth  overflow  to  waste  over  some  favored 
regions,  often  producing  a  morass,  which  poisons  the  social  atmosphere.  Many 
have  to  depend  on  a  little  trickling  runlet,  which  quickly  evaporates  with  every 
commercial  or  industrial  drought;  sometimes  you  have  masses  of  men  and 
women  whom  the  flood  at  its  height  barely  reaches,  and  then  you  witness 
parched  specimens  of  humanity,  withered,  hardened  in  misery,  living  in  a  desert 
where  even  the  well  of  tears  has  long  ago  run  dry. 

1  Prof.  Willard  I.  King,  The  Wealth  and  Income  of  the  People  of  the  United  States. 
38819°— 16 3* 


34  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

Besides  the  economic  significance  of  these  great  inequalities  of 
wealth  and  income,  there  is  a  social  aspect  which  equally  merits  the 
attention  of  Congress.  It  has  been  shown  that  the  great  fortunes  of 
those  who  have  profited  by  the  enormous  expansion  of  American  in- 
dustry have  already  passed,  or  will  pass  in  a  few  years,  by  right  of 
inheritance  to  the  control  of  heirs  or  to  trustees  who  act  as  their 
"  vice  regents."  They  are  frequently  styled  by  our  newspapers 
"monarchs  of  industry,"  and  indeed  occupy  within  our  Eepublic  a 
position  almost  exactly  analogous  to  that  of  feudal  lords. 

These  heirs,  owners  only  by  virtue  of  the  accident  of  birth,  control 
the  livelihood  and  have  the  power  to  dictate  the  happiness  of  more 
human  beings  than  populated  England  in  the  Middle  Ages.  Their 
principalities,  it  is  true,  are  scattered  and,  through  the  medium  of 
stock  ownership,  shared  in  part  with  others;  but  they  are  none  the 
less  real.  In  fact,  such  scattered  invisible  industrial  principalities 
are  a  greater  menace  to  the  welfare  of  the  Nation  than  would  be  equal 
power  consolidated  into  numerous  petty  kingdoms  in  different  parts 
of  the  country.  They  might  then  be  visualized  and  guarded  against ; 
now  their  influence  invisibly  permeates  and  controls  every  phase  of 
life  and  industry. 

"  The  king  can  do  no  wrong,"  not  only  because  he  is  above  the  law 
but  because  every  function  is  performed  or  responsibility  assumed  by 
his  ministers  and  agents.  Similarly  our  Rockefellers,  Morgans, 
Fricks,  Vanderbilts,  and  Astors  can  dp  no  industrial  wrong,  because 
all  effective  action  and  direct  responsibility  is  shifted  from  them  to 
the  executive  officials  who  manage  American  industry.  As  a  basis 
for  this  conclusion  we  have  the  testimony  of  many,  among  which, 
however,  the  following  statements  stand  out  most  clearly : 

Mr.  John  D.  Rockefeller,  jr.:1 

*  *  *  Those  of  us  who  are  in  charge  there  elect  the  ablest  and  most 
upright  and  competent  men  whom  we  can  find,  in  so  far  as  our  interests  give 
us  the  opportunity  to  select,  to  have  the  responsibility  for  the  conduct  of  the 
business  in  which  we  are  interested  as  investors.  We  can  not  pretend  to  follow 
the  business  ourselves. 

Mr.  J.  Pierpont  Morgan : 

Chairman  WALSH.  In  your  opinion,  to  what  extent  are  the  directors  of  cor- 
porations responsible  for  the  labor  conditions  existing  in  the  industries  in  which 
they  are  the  directing  power? 

Mr.  MOBGAN.  Not  at  all  I  should  say. 

The  similitude,  indeed,  runs  even  to  mental  attitude  and  phrase. 
Compare  these  two  statements: 
Mr.  John  D.  Rockefeller,  jr. : 

My  appreciation  of  the  conditions  surrounding  wage  earners  and  my  sympathy 
with  every  endeavor  to  better  these  conditions  are  as  strong  as  those  of  any 
man. 

Louis  XVI: 

There  is  none  but  you  and  me  that  has  the  people's  interest  at  heart.  ("  II 
n'y  a  que  vous  et  moi  aimions  le  peuple.") 

The  families  of  these  industrial  princes  are  already  well  estab- 
lished and  are  knit  together  not  only  by  commercial  alliances  but  by 
a  network  of  intermarriages  which  assures  harmonious  action  when- 
ever their  common  interest  is  threatened. 

1  Before  congressional  investigating  committee. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  35 

Effective  action  by  Congress  is  required,  therefore,  not  only  to 
readjust  on  a  basis  of  compensation  approximating  the  service  actu- 
ally performed,  the  existing  inequalities  in  the  distribution  of 
wealth  and  income,  but  to  check  the  growth  of  an  hereditary  aris- 
tocracy, which  is  foreign  to  every  conception  of  American  Govern- 
ment and  menacing  to  the  welfare  of  the  people  and  the  existence  of 
the  Nation  as  a  democracy. 

The  objects  to  be  attained  in  making  this  readjustment  are:  To 
reduce  the  swollen,  unearned  fortunes  of  those  who  have  a  super- 
fluity ;  to  raise  the  underpaid  masses  to  a  level  of  decent  and  comfort- 
able living ;  and  at  the  same  time  to  accomplish  this  on  a  basis  which 
will,  in  some  measure,  approximate  the  just  standard  of  income  pro- 
portional to  service. 

The  discussion  of  how  this  can  best  be  accomplished  forms  the 
greater  part  of  the  remainder  of  this  report,  but  at  this  point  it 
seems  proper  to  indicate  one  of  the  most  immediate  steps  which 
need  to  be  taken. 

It  is  suggested  that  the  commission  recommend  to  Congress  the 
enactment  of  an  inheritance  tax,  so  graded  that,  while  making  gen- 
erous provision  for  the  support  of  dependents  and  the  education  of 
minor  children,  it  shall  leave  no  large  accumulation  of  wealth  to  pass 
into  hands  which  had  no  share  in  its  production.1  The  revenue 
from  this  tax,  which  we  are  informed  would  be  very  great,  should 
be  reserve.d  by  the  Federal  Government  for  three  principal  purposes : 

1.  The  extension  of  education. 

2.  The   development   of   other   important   social   services   which, 
should  properly  be  performed  by  the  Nation,  which  are  discussed  in 
detail  elsewhere. 

3.  The  development,  in  cooperation  wivh  States  and  municipali- 
ties, of  great  constructive  works,  such  as  road  building,  irrigation, 
and  reforestation,  which  would  materially  increase  the  efficiency  and 
welfare  of  the  entire  Nation. 

We  are  informed  by  counsel  not  only  that  such  a  tax  is  clearly 
within  the  power  of  Congress,  but  that  upon  two  occasions,  namely, 
during  the  Civil  War  and  in  1898,  such  graded  inheritance  taxes 
were  enacted  with  scarcely  any  opposition  and  were  sustained  by  the 
Supreme  Court,  which  held  that  the  inheritance  tax  was  not  a  direct 
tax  within  the  meaning  of  the  Constitution.  We  are  aware  that 
similar  taxes  are  levied  in  the  various  States,  but  the  conflict  with 
such  State  taxes  seems  to  have  presented  little  difficulty  during  the 
period  in  which  the  tax  of  1898  was  in  effect.  Under  any  circum- 
stances this  need  cause  no  great  complication,  as  the  matter  could  be 
readily  adjusted  by  having  the  Federal  Government  collect  the  en- 
tire tax  and  refund  a  part  to  the  States  on  an  equitable  basis. 

There  is  no  legislation  which  could  be  passed  by  Congress  the 
immediate  and  ultimate  efforts  of  which  would  be  more  salutary  or 
would  more  greatly  assist  in  tempering  the  existing  spirit  of  unrest. 

2.  UNEMPLOYMENT  AND  DENIAL  OF  OPPORTUNITY  TO  EARN  A  LIVING. 

As  a  prime  cause  of  a  burning  resentment  and  a  rising  feeling  of 
unrest  among  the  workers,  unemployment  and  the  denial  of  an  op- 

1  It  is  suggested  that  the  rates  be  so  graded  that  not  more  than  $1,000,000  shall  pass  to 
the  heirs.  This  can  be  equitably  accomplished  by  several  different  gradations  of  taxation. 


36  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

portunity  to  earn  a  living  is  on  a  parity  with  the  unjust  distribution 
of  wealth.  They  may  on  final  analysis  prove  to  be  simply  the  two 
sides  of  the  same  shield,  but  that  is  a  matter  which  need  not  be  dis- 
cussed at  this  point.  They  differ  in  this,  however,  that  while  un- 
just distribution  of  wealth  is  a  matter  of  degree,  unemployment  is 
an  absolute  actuality,  from  which  there  is  no  relief  but  soul-killing 
crime  and  soul-killing  charity. 

To  be  forced  to  accept  employment  on  conditions  which  are  insuffi- 
cient to  maintain  a  decent  livelihood  is  indeed  a  hardship,  but  to  be 
unable  to  get  work  on  any  terms  whatever  is  a  position  of  black 
despair. 

A  careful  analysis  of  all  available  statistics  shows  that  in  our  great 
basic  industries  the  workers  are  unemployed  for  an  average  of  at 
least  one-fifth  of  the  year,  and  that  at  airtimes  during  any  normal 
year  there  is  an  army  of  men,  who  can  be  numbered  only  by  hundreds 
of  thousands,  who  are  unable  to  find  work  or  who  have  so  far  degen- 
erated that  they  can  not  or  will  not  work.  Can  any  nation  boast  of 
industrial  efficiency  when  the  workers,  the  source  of  her  productive 
wealth,  are  employed  to  so  small  a  fraction  of  their  total  capacity  ? 

Fundamentally,  this  unemployment  seems  to  rise  from  two  great 
causes,  although  many  others  are  contributory.  First,  the  inequality 
of  the  distribution  of  income  which  leaves  the  great  masses  of  the 
population  (the  true  ultimate  consumers)  unable  to  purchase  the 
products  of  industry  which  they  create,  wrhile  a  few  have  such  a  super- 
fluity that  it  can  not  be  normally  consumed  but  must  be  invested  in 
new  machinery  for  production  or  in  the  further  monopolization  of 
land  and  natural  resources.  The  result  is  that  in  mining  and  other 
basic  industries  we  have  an  equipment  in  plant  and  developed  prop- 
erty far  in  excess  of  the  demands  of  any  normal  year,  the  excess  being, 
in  all  probability,  at  least  25  per  cent.  Each  of  these  mines  and 
industrial  plants  keeps  around  it  a  labor  force  which,  on  the  average, 
can  get  work  for  only  four-fifths  of  the  year,  while  at  the  same  time 
the  people  have  never  had  enough  of  the  products  of  those  very  indus- 
tries— have  never  been  adequately  fed,  clothed,  housed,  nor  warmed — 
for  the  very  simple  reason  that  they  have  never  been  paid  enough  to 
permit  their  purchase. 

The  second  principal  cause  lies  in  the  denial  of  access  to  land  and 
natural  resources  even  when  they  are  unused  and  unproductive,  ex- 
cept at  a  price  and  under  conditions  which  are  practically  prohibi- 
tive. This  situation,  while  bound  up  with  the  land  and  taxation 
policies  of  our  States  and  Nation,  also  rests  fundamentally  upon  the 
unjust  distribution  of  wealth.  Land  or  mineral  resources  in  the 
hands  of  persons  of  average  income  must  and  will  be  used  either  by 
their  original  owners  or  by  some  more  enterprising  person.  By  the 
overwhelming  forces  of  economic  pressure,  taxation,  and  competi- 
tion they  can  not  be  permitted  to  lie  idle  if  they  will  produce  any- 
thing which  the  people  need.  Only  in  the  hands  of  large  owners — 
free  from  economic  pressure,  able  to  evade  or  minimize  the  effects 
of  taxation  and  to  awrait  the  ripening  of  the  fruits  of  unearned  in- 
crement— can  land  be  held  out  of  use  if  its  products  are  needed. 

There  can  be  no  more  complete  evidence  of  the  truth  of  this  state- 
ment than  the  condition  of  the  farms  of  1,000  acres  and  over,  which, 
valued  at  two  and  one-third  billion  dollars,  comprise  19  per  cent  of 
all  the  farm  land  of  the  country  and  are  held  by  less  than  1  per  cent 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  37 

* 

of  the  farm  owners.  The  United  States  census  returns  show  that 
in  these  1,000-acre  farms  only  18.7  per  cent  of  the  land  is  cultivated 
as  compared  with  60  to  70  per  cent  in  farms  of  from  50  to  499  acres. 
Furthermore,  it  is  well  known  that  the  greater  part  of  these  smaller 
farms  which  are  left  uncultivated  are  held  by  real  estate  men,  bank- 
ers, and  others  wrho  have  independent  sources  of  income.  More  than 
four-fifths  of  the  area  of  the  large  holdings  is  being  held  out  of  active 
use  by  their  50,000  owners,  while  2,250,000  farmers  are  struggling 
for  a  bare  existence  on  farms  of  less  than  50  acres,  and  an  untold 
number  who  would  willingly  work  these  lands  are  swelling  the 
armies  of  the  unemployed  in  the  cities  and  towns. 

A  basic  theory  of  our  Government,  which  found  expression  in  the 
homestead  acts,  was  that  every  man  should  have  opportunity  to  secure 
land  enough  to  support  a  family.  If  this  theory  had  been  carried 
out  and  homesteads  had  either  gone  to  those  who  would  use  them 
productively  or  remained  in  the  hands  of  the  Government,  we  should 
not  yet  have  a  problem  of  such  a  character.  But  these  acts  were 
evaded;  land  was  stolen  outright  by  wholesale^ and  fraudulent  en- 
tries were  consolidated  into  enormous  tracts  which  are  now  held  by 
wealthy  individuals  and  corporations. 

The  Public  Lands  Commission,  after  an  exhaustive  inquiry,  re- 
ported in  1905 : 

Detailed  study  of  the  practical  operation  of  the  present  land  laws  shows  that 
their  tendency  far  too  often  is  to  bring  about  land  monopoly  rather  than  to 
multiply  small  holdings  by  actual  settlers. 

*  *  *  Not  infrequently  their  effect  is  to  put  a  premium  on  perjury  and 
dishonest  methods  in  the  acquisition  of  land.  It  is  apparent,  in  consequence, 
that  in  very  many  localities,  and  perhaps  in  general,  a  larger  proportion  of  the 
public  land  is  passing  into  the  hands  of  speculators  than  into  those  of  actual 
settlers  making  homes.  *  *  *  Nearly  everywhere  the  large  landowner 
has  succeeded  in  monopolizing  the  best  tracts,  whether  of  timber  or  agricul- 
tural lands. 

To  one  who  has  not  read  the  preceding  statements  carefully  there 
may  seem  to  be  a  contradiction  in  proposing  to  prevent  great  capi- 
talists from  creating  an  excess  of  productive  machinery  and  over- 
developing mineral  resources  while  pointing  out  the  necessity  of 
forcing  land  and  other  natural  resources  into  full  and  effective  use 
by  the  people.  The  two  propositions  are,  as  a  matter  of  fact,  as 
fundamentally  distinct  as  monopoly  and  freedom.  The  capitalist 
increases  his  holdings  in  productive  machinery  and  resources  only 
because  through  monopolization  and  maintenance  of  prices  he  hopes 
to  reap  rewards  for  himself  or  increase  his  power,  while  the  aim 
in  desiring  the  full  development  of  land  and  other  resources  by  the 
people  is  that  they,  producing  for  themselves,  may  enjoy  a  sufficiency 
of  good  things  and  exchange  them  for  the  products  of  others,  and 
thus  reduce  to  a  minimum  the  condition  of  unemployment. 

There  are,  of  course,  many  other  causes  of  unemployment  than  the 
inequality  of  wealth  and  the  monopolization  of  land  which  there  is 
no  desire  to  minimize.  Chief  among  these  are  immigration,  the  inade- 
quate organization  of  the  labor  market,  the  seasonal  character  of 
many  industries,  and  the  personal  deficiencies  of  a  very  large  num- 
ber of  the  unemployed.  It  can  not  be  denied  that  a  considerable 
proportion  of  the  men  who  fill  the  city  lodging  houses  in  winter  are 
virtually  unemployables  as  a  result  of  weakness  of  character,  lack 

1  S.  Doc.  154,  58th  Cong.,  3d  sess.,  p.  14. 


38  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

of  training,  the  debasing  effects  of  lodging-house  living  and  city 
dissipation,  and,  last  but  not  least,  the  conditions  under  which  they 
are  forced  to  work  in  the  harvest  fields  and  lumber,  railroad,  and 
construction  camps.  The  seasonal  fluctuations  of  our  industries  are 
enormous,  employing  hundreds  of  thousands  during  the  busy  season 
and  throwing  them  out  on  the  community  during  the  dull  season, 
and  almost  nothing  has  been  done  to  remedy  this  condition.  It  would 
be  difficult  to  imagine  anything  more  chaotic  and  demoralizing  than 
the  existing  methods  of  bringing  workmen  and  jobs  together.  Cer- 
tain measures  for  dealing  with  these  conditions,  which  are  discussed 
elsewhere  in  the  report,  need  to  be  pushed  forward  with  all  possible 
vigor.  But  it  may  be  confidently  predicted  that  the  unemployment 
situation  will  not  be  appreciably  relieved  until  great  advances  have 
been  made  in  the  removal  of  the  two  prime  causes — unjust  distribu- 
tion of  wealth  and  monopolization  of  land  and  natural  resources. 

The  most  direct  methods  of  dealing  with  the  inequality  of  wealth 
have  already  been  briefly  discussed  and  will  be  considered  elsewhere 
in  the  report.  With  respect  to  the  land  question,  however,  the  fol- 
lowing basic  suggestions  are  submitted : 

1.  Vigorous  and  unrelenting  prosecutions  to  regain  all  land,  water 
power,  and  mineral  rights  secured  from  the  Government  by  fraud. 

2.  A  general  revision  of  our  land  laws,  so  as  to  apply  to  all  future 
land  grants  the  doctrine  of  "superior  use,"  as  in  the  case  of  water 
rights  in  California,  and  provision  for  forfeiture  in  case  of  actual 
nonuse.     In  its  simplest  form  the  doctrine  of  "  superior  use  "  implies 
merely  that  at  the  time  of  making  the  lease  the  purpose  for  which 
the  land  will  be  used  must  be  taken  into  consideration,  and  the  use 
which  is  of  greatest  social  value  shall  be  given  preference. 

3.  The  forcing  of  all  unused  land  into  use  by  making  the  tax  on 
nonproductive  land  the  same  as  on  productive  land  of  the  same 
kind  and  exempting  all  improvements. 

Other  measures  for  dealing  with  unemployment  are  discussed 
under  that  head  on  pages  103-115. 

The  unemployed  have  aptly  been  called  "the  shifting  sands  be- 
neath the  State."  Surely  there  is  no  condition  which  more  immedi- 
ately demands  the  attention  of  Congress  than  that  of  unemploy- 
ment, which  is  annually  driving  hundreds  of  thousands  of  other- 
wise productive  citizens  into  poverty  and  bitter  despair,  sapping  the 
very  basis  of  our  national  efficiency,  and  germinating  the  seeds  of 
revolution. 


3.    DENIAL  OF   JUSTICE. 


No  testimony  presented  to  the  commission  has  left  a  deeper  im- 
pression than  the  evidence  that  there  exists  among  the  workers  an 
almost  universal  conviction  that  they,  both  as  individuals  and  as  a 
class,  are  denied  justice  in  the  enactment,  adjudication,  and  adminis- 
tration of  law,  that  the  very  instruments  of  democracy  are  often 
used  to  oppress  them  and  to  place  obstacles  in  the  way  of  their 
movement  toward  economic,  industrial,  and  political  freedom  and 
justice.  Many  witnesses,  speaking  for  millions  of  workers  as  well 
as  for  themselves,  have  asserted  with  the  greatest  earnestness  that 
the  mass  of  the  workers  are  convinced  that  laws  necessary  for  their 
protection  against  the  most  grievous  wrongs  can  not  be  passed  ex- 
cept after  long  and  exhausting  struggles ;  that  such  beneficent  meas- 


REPORT  OF   COMMISSION   OX   INDUSTRIAL  RELATIONS.  39 

ures  as  become  laws  are  largely  nullified  by  the  unwarranted  deci- 
sions of  the  courts ;  that  the  laws  which  stand  upon  the  statute  books 
are  not  equally  enforced;  and  that  the  whole  machinery  of  Gov- 
ernment has  frequently  been  placed  at  the  disposal  of  the  employers 
for  the  oppression  of  the  workers;  that  the  Constitution  itself  has 
been  ignored  in  the  interests  of  the  employers;  and  that  constitu- 
tional guaranties  erected  primarily  for  the  protection  of  the  workers 
have  been  denied  to  them  and  used  as  a  cloak  for  the  misdeeds  of 
corporations. 

If  it  be  true  that  these  statements  represent  the  opinions  of  the 
mass  of  American  workers,  there  is  reason  for  grave  concern,  for 
there  are  25,000,000  of  them,  of  whom  3,000,000  are  welded  together 
into  compact  organizations. 

But  if  it  be  true  that  these  charges  are  justified;  if,  in  fact,  our 
legislators,  our  judges,  and  executives,  do  not  afford  equal  considera- 
tion to  the  workers  and  are  concerned  with  protecting  the  rights  of 
property  rather  than  the  rights  of  men,  and  at  times  even  become 
the  instruments  for  the  oppression  of  the  poor  and  humble,  then  the 
situation  demands  and  must  receive  the  prompt  and  decisive  action 
of  every  right-thinking  man  in  order  that  these  evils  may  be  eradi- 
cated and  justice  and  liberty  established  in  the  place  of  injustice 
and  oppression. 

Before  examining  the  evidence,  it  should  be  understood  that  it  is 
not  charged  that  such  acts  of  injustice  are  universal,  but  that  they 
occur  so  frequently  and  in  such  diverse  parts  of  the  country  that 
any  man  may  reasonably  fear  that  he  himself  or  those  with  whom 
he  is  associated  may  at  any  time  be  the  victim  of  injustice  or  dis- 
crimination. It  has  been  urged,  and  perhaps  properly,  that  the 
charges  would  be  sustained  if  it  were  found  that  such  acts  of  injus- 
tice had  been  committed  only  upon  rare  occasions,  if  it  should  also 
be  established  that  such  injustices  were  allowed  to  stand  without 
redress,  and  if  those  who  were  guilty  of  their  commission  were  left 
unimpeached  and  unpunished. 

An  enormous  mass  of  evidence  bearing  upon  these  charges  has 
been  presented  to  the  commission  by  witnesses  or  collected  by  its 
staff.  This  material  is  presented  in  some  detail  in  another  part  of 
the  report,  but  the  summary  which  follows  may  be  regarded  as  rea- 
sonably full  and  exact. 

First,  with  regard  to  the  enactment  of  laws,  it  is  charged  that  the 
workers  have  been  unable  to  secure  legislation  to  protect  them  against 
griev.ous  wrongs,  except  after  exhausting  struggles  against  over- 
whelming odds  and  against  insidious  influences. 

The  evidence  bearing  upon  this  question  has  dealt  with  the  his- 
tory of  three  principal  lines  of  legislation  in  which  the  evils  sought 
to  be  remedies  are  now  universally  admitted  to  have  been  Very  great, 
involving  wanton  destruction  of  life,  the  exploitation  of  women 
and  children,  and  the  practical  enslavement  of  American  seamen. 
A  careful  examination  has  been  made  of  the  history  of  attempts  to 
secure  adequate  legislation  to  prevent  child  labor,  to  protect  women 
against  extreme  hours  of  labor  and  night  work,  to  secure  the  safety 
of  factories,  railroads,  and  mines,  and  to  provide  for  the  safety,  com- 
fort, and  liberty  of  seamen. 

The  history  of  child-labor  legislation  shows  that  although  agita- 
tion for  the  protection  and  education  of  children  began  during  the 


40  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

early  part  of  the  nineteenth  century  in  Massachusetts,  Rhode  Island, 
Connecticut,  New  York,  and  Pennsylvania,  no  adequate  legislation 
was  obtained  until  nearly  the  end  of  the  century.  Time  after  time 
in  each  of  these  industrial  States  the  sentiment  of  the  public  was 
aroused,  organization  was  effected,  and  well-drafted  bills  were  intro- 
duced only  to  be  killed  in  committee,  emasculated  or  killed  on  the 
floor  of  the  legislature,  or  passed  with  exceptions  which  rendered 
them  entirely  ineffective.  Even  the  attempt  to  reduce  the  hours  of 
children  below  12  per  day  was  bitterly  contested  and  met  by  every 
known  trick  of  legislative  chicanery.  The  wThole  history  of  the  con- 
test for  adequate  child-labor  legislation  is  even  now  being  repeated 
in  some  of  the  Southern  States,  where  laws  prohibiting  the  employ- 
ment of  children  are  bitterly  contested  and  beaten  session  after  ses- 
sion by  legislators,  unsympathetic  or  controlled  by  the  cotton-mill 
interests. 

Similarly,  although  the  movement  to  restrict  the  working  hours 
of  women  and  to  prohibit  night  work  began  in  Massachusetts'  and 
Pennsylvania  as  early  as  1840,  the  first  legislation  limiting  the  hours 
was  the  10-hour  bill  passed  in  Massachusetts  in  1874,  and  night  work 
went  unregulated  until  the  passage  of  the  act  of  1899  in  Nebraska.1 

The  movement  for  safety  of  life  and  limb  in  the  factories  and 
workshops,  although  pushed  with  great  vigor  in  almost  every  session 
of  the  State  legislatures  after  1880,  secured  only  a  few  acts  providing 
for  such  obvious  matters  as  the  guarding  of  set  screws  and  gears, 
but  made  practically  no  provision  for  their  enforcement.  No  really 
effective  -action  to  promote  safety  took  place  until,  after  many  years 
of  hard  fighting,  the  first  workmen's  compensation  acts  were  passed 
between  1900  and  1910,  which  for  the  first  time  made  the  unsafe  con- 
dition of  factories  directly  expensive. 

Even  upon  the  railroads,  where  the  safety  of  the  public  as  well  as 
of  the  workers  was  involved,  at  least  10  years  of  constant  agitation 
on  the  part  of  the  railroad  brotherhoods  and  various  interested  citi- 
zens was  necessary  before  the  first  Federal  act  providing  for  safety 
appliances  was  passed  in  1893. 

In  the  case  of  the  movement  to  secure  the  safety,  comfort,  and 
liberty  of  seamen,  it  is  a  matter  of  record  that  Andrew  Furuseth, 
president  of  the  seamen's  union,  backed  not  only  by  all  the  members 
of  his  own  organization  but  by  the  entire  American  labor  move- 
ment, attended  each  session  of  Congress  and  devoted  his  whole  ener- 
gies to  securing  legislation  upon  this  subject  for  the  entire  period  of 
22  years  from  1893  to  1915,  when  the  seamen's  bill  finally  became  a 
law. 

Other  evidence  has  been  presented  covering  the  long  fights  to 
secure  legislation  to  remove  the  evils  of  company  stores,  payment  in 
scrip,  prison  labor,  arbitrary  deductions  from  wages,  "  sweating," 
tenement  houses,  and  a  number  of  other  matters  upon  which  ade- 

1  It  is  worthy  of  note  that  although  the  decision  on  the  Massachusetts  law  was  favorable 
and  thus  established  a  precedent  (Commonwealth  v.  Hamilton  Mfg.  Co.,  120  Mass.,  ::8:;».  it 
was  thrown  aside  by  the  Illinois  court  in  1895  in  holding  unconstitutional  a  law  of  that 
State  prescribing  an  8-hour  day  for  women  (Ritchie  v.  People,  155  111.,  98),  and  it  was  not 
until  1910  that  the  same  court  accepted  a  10-hour  law  as  constitutional  (Ritchie  v. 
Wyman,  244  111.,  509).  The  Nebraska  statute  limited  the  hours  of  women  to  10  a  day  and 
prohibited  night  work  between  the  hours  of  10  p.  m.  and  6  a.  m.,  but  the  first  case  did  not 
raise  the  question  of  night  work  (Wenham  v.  State,  65  Neb.,  394).  In  New  York,  however, 
a  statute  regulating  night  work  was  held  unconstitutional  in  1907  (People  v.  Williams,  189 
N.  Y.,  131  ,  and  it  was  not  until  the  present  year  that  a  similar  law  was  sustained  (People 
v.  Schweinler  Press,  214  N.  Y.,  395). 


REPORT  OF   COMMISSION    ON  INDUSTRIAL   RELATIONS.  41 

quate  legislation  has  not  yet  been  secured,  except  perhaps  in  a  few 
States,  although  there  has  been  unremitting  agitation  upon  these 
questions  for  more  than  half  a  century.  This  evidence  shows  clearly 
that  the  workers  have  just  grounds  for  the  charge  that  the  legisla- 
tures have  been  criminally  slow  in  acting  for  the  relief  of  grievous 
wrongs  and  have  used  every  subterfuge  to  escape  adequate  and 
aggressive  action,  even  while  thousands  of  men,  women,  and  children 
were  being  killed,  maimed,  or  deformed  as  a  result  of  their  negli- 
gence. 

Evidence  has  further  been  presented  to  show  that  such  a  condition 
has  not  been  the  result  entirely  of  the  complacency  or  slothfulness 
of  legislators,  but  that  powerful  influences  have  been  at  work  to 
prevent  such  remedial  legislation.  The  most  convincing  evidence 
presented  upon  this  phase  of  the  question  is  the  record  of  the  Na- 
tional Association  of  Manufacturers  and  its  allied  organizations,  as 
contained  in  the  testimony  and  findings  before  congressional  com- 
mittees,1 in  the  printed  reports  of  that  association  and  in  the  testi- 
mony before  the  commission  of  the  representatives  of  various  State 
employers'  associations.  The  substance  of  this  evidence  is  so  well 
known  to  Congress  and  to  the  public  that  it  is  necessary  here  to  call 
attention  only  to  the  fact  that  the  efforts  of  such  associations  in 
preventing  the  enactment  of  practically  all  legislation  intended  to 
improve  the  condition  or  advance  the  interests  of  workers  were  not 
confined  to  Congress,  but  were  even  more  effective  in  the  State 
legislatures. 

The  persistent  and  bitter  manner  in  which  the  railroads  fought 
the  laws  providing  for  safety  appliances,  although  the  measures  were 
moderate  and  necessary,  not  only  for  the  safety  of  the  traveling 
public,  but  for  the  efficient  operation  of  the  roads,  is  well  known  to 
Congress. 

Perhaps  the  most  significant  statement  regarding  the  insidious 
influences  of  this  character  is  contained  in  a  letter  from  Mr.  L.  M. 
Bowers,  chairman  of  the  board  of  directors  of  the  Colorado  Fuel  & 
Iron  Co.,  to  the  Secretary  of  Mr.  John  D.  Rockefeller,  jr.,  under  date 
of  May  13,  1913 : 

The  Colorado  Fuel  £  Iron  Co.  for  many  years  were  accused  of  being  the 
political  dictator  of  southern  Colorado,  and,  in  fact,  were  a  mighty  power  in 
the  entire  State.  When  I  came  here  it  was  said  that  the  C.  F.  &  I.  Co.  voted 
every  man  and  woman  in  their  employ  without  any  regard  to  their  being  nat- 
uralized or  not,  and  even  their  mules,  it  used  to  be  remarked,  were  registered 
if  they  were  fortunate  enough  to  possess  names.  Anyhow,  a  political  depart- 
ment was  maintained  at  a  heavy  expense.  I  had  before  me  the  contributions 
of  the  C.  F.  &  I.  Co.  for  the  campaign  of  1904,  amounting  to  $80,605,  paid  out 
personally  by  President  Hearne.  All  the  vouchers  and  checks  I  have  examined 
personally,  all  of  which  were  payable  to  Albert  A.  Miller,  upon  which  he  drew 
the  currency  and,  it  is  said,  handed  the  money  over  to  Mr.  Hearne,  who  paid 
it  out.  So  far  as  I  can  discover,  not  one  particle  of  good  was  accomplished  for 
the  company,  but  Mr.  Hearne  was  an  aspirant  for  the  position  of  United  Spates 
Senator  and  devoted  a  vast  amount  of  time  and  money  with  this  end  in  view,  I 
have  no  doubt. 

The  company  became  notorious  in  many  sections  for  their  support  of  the 
liquor  interests.  They  established  saloons  everywhere  they  possibly  could. 

1  U.  S.  Senate  Committee  on  Judiciary.  Maintenance  of  a  Lobby  to  Influence  Legisla- 
tion. Hearings  before  a  subcommittee  pursuant  to  S.  Res.  92,  63d  Cong.,  1st  sess. 

Charges  Against  Members  of  the  House  and  Lobby  Activities  of  the  National  Association 
of  Manufacturers  of  the  United  States  and  Others.  Hearings  before  select  committee  of 
House  of  Representatives  appointed  under  H.  Res.  198,  63d  Cong.,  1st  sess. 


42  EEPOKT  OF   COMMISSION   ON  INDUSTKIAL  RELATIONS. 

This  department  was  managed  by  one  John  Kebler,  a  brother  of  the  one-time 
president  of  the  company,  who  died  about  the  time  I  came  here,  a  victim  of  hia 
own  intemperate  habits.  A  sheriff,  elected  by  the  votes  of  the  G.  P.  &  I.  Co. 
employees,  and  who  has  been  kept  in  office  a  great  many  years,  established  him- 
self or  became  a  partner  in  16  liquor  stores  in  our  coal  mines.  To  clean  up  the 
saloons  and  with  them  the  gambling  hells  and  houses  of  prostitution  has  been 
one  of  the  things  that  Mr.  Welborn  and  I  have  devoted  an  enormous  amount  of 
time  to  during  the  past  five  years.  The  decent  newspapers  everlastingly  lam- 
pooned the  C.  F.  &  I.  Co.  at  every  election,  and  I  am  forced  to  say  the  company 
merited,  from  a  moral  standpoint,  every  shot  that  was  fired  into  their  camp. 
Since  I  came  here  1  not  a  nickel  has  been  paid  to  any  politician  or  political 
party.  We  have  fought  the  saloons  with  all  the  power  we  possess.  We  have 
forbidden  any  politician  from  going  into  our  camps,  and  every  subordinate  offi- 
cial connected  with  the  company  has  been  forbidden  to  influence  our  men  to 
vote  for  any  particular  candidate.  We  have  not  lobbied  in  the  legislature,  but 
have  gone  directly  to  the  governor  and  other  able  men  and  have  demanded  fair 
treatment. 

Second,  it  is  charged  by  the  workers  that  after  wholesome  and 
necessary  laws  are  passed  they  are  in  large  part  nullified  by  the  courts 
either  upon  technicalities  of  a  character  which  would  not  be  held  to 
invalidate  legislation  favorable  to  the  interests  of  manufacturers, 
merchants,  bankers,  and  other  property  owners,  or  thrown  out  on  the 
broad  ground  of  unconstitutionally,  through  strained  or  illogical 
construction  of  constitutional  provisions.  It  is  argued  that  such 
action  is  doubly  evil,  because  the  power  to  declare  legislative  acts 
unconstitutional  has  been  assumed  by  the  courts  in  the  face  of  a 
complete  absence  of  legal  sanction,  in  complete  disregard  of  early 
decisions  denying  the  possession  of  such  power,  and  in  complete  con- 
trast to  the  practices  of  the  courts  in  every  other  country  of  the 
civilized  world.  It  is  not  within  our  province  to  decide  whether  or 
not  this  assumption  of  power  by  the  courts  was  justified.  It  is  suffi- 
cient here  merely  to  examine  the  evidence  bearing  upon  the  allega- 
tions that  laws  necessary  for  the  correction  of  grave  industrial  abuses 
are  nullified  by  strained  interpretations  or  for  reasons  which  would 
be  insufficient  in  other  cases,  and  that  they  are  held  unconstitutional 
upon  pretexts  which  in  reality  are  the  outgrowth  of  economic  bias 
on  the  part  of  the  judges. 

A  large  number  of  decisions  illustrating  these  points  have  been 
brought  to  the  attention  of  the  commission,  but  only  a  few  need  be 
cited  here.  It  has  been  held,  for  example,  even  that  statutes  requiring 
dangerous  machinery  to  be  guarded  may  be  disobeyed  by  the  em- 
ployer, and  children  employed  about  such  unguarded  machinery 
are  held  to  have  assumed  the  risk.2  The  same  has  been  held  regarding 
the  employment  of  women.3 

Many  other  cases  might  be  cited  on  the  question  of  strained  in- 
terpretation,4 bearing  out  the  assertion  made  by  Justice  Lurton,  of 

1  This  statement  of  Mr.  Bowers  should  be  considered  in  conjunction  with  his  testimony 
that  the  evil  influences  created  by  the  Colorado  Fuel  &  Iron  Co.  were  still  in  power  and  his 
admission  that  the  company  was  deeply  interested  in  the  last  State  election  and  that  150 
men  were  put  into  the  field  from  his  office  alone  to  work  for  the  candidates  favored  by  the 
company,  which  was  deeply  interested  in  the  election  of  officials  who  would  vigorously 

Srosecute  the  strikers.     His  letters  narrating  how  the  governor  of  Colorado  was  whipped 
ato  line  should  also  be  considered,  as  well  as  the  testimony  of  Dr.  B.  S.  Gaddis,  former 
head  of  the  sociological  department  of  the  Colorado  Fuel  &  Iron  Co.,  that  officials  openly 
influenced   elections. 

2  Higgins  v.  O'Keefe,  79  Fed.,  900 ;  White  v.  Wittemann  Lith.  Co.,  131  N.  ¥.,  631. 

3  Knisley  v.  Pratt,  148  N.  Y.,  372. 

*  Nappa  v.  Erie  Ry.  Co.,  195  N.  Y,,  176,  184  ;  Gallagher  v.  Newman,  190  N.  Y.,  444, 
447-448  ;  Cashman  v.  Chase,  156  Mass.,  342  ;  Quinlan  v.  Lackawanna  Steel  Co.,  107  A.  D. 
176,  affirmed  191  N.  Y./329  ;  Finnigan  v.  N,  Y.  Contracting  Co.,  194  N.  Y.,  244. 


BEPOKT  OF   COMMISSION-   ON   INDUSTRIAL   RELATIONS.  43 

the  Federal  Supreme  Court,  when,  in  a  case  not  involving  industrial 
relations,  he  says: 

The  judgment  just  rendered  will  have,  as  I  think,  the  effect  to  defeat  the 
clearly  expressed  will  of  the  legislature  by  a  construction  of  its  words  that 
can  not  be  reconciled  with  their  ordinary  meaning.1 

Probably  there  are  no  other  cases  which  have  created  so  much 
bitterness  as  those  of  personal  injury  in  which  the  plaintiffs  have 
been  denied  recovery  of  damages  on  the  principles  of  "  fellow  serv- 
ant," "  assumption  of  risk,"  and  "  contributory  negligence,"  and  the 
obstacles  which  have  been  created  by  the  courts  to  prevent  the  re- 
moval of  these  defenses  for  the  employer  have  served  only  to  in- 
tensify the  feeling.  The  contrast  in  attitude  of  the  judges  can  not 
better  be  shown  than  by  considering  that  while  they  have  held  each 
employee  of  a  corporation  responsible  under  these  three  principles 
not  only  for  his  own  involuntary  acts  but  for  the  physical  condition 
of  the  entire  property  and  the  conduct  of  each  of  his  fellow  workers, 
they  have  repeatedly  absolved  officials,  directors,  and  stockholders 
from  responsibility  for  accidents,  even  when  the  unsafe  condition  of 
the  property  had  been  published,  or  when  orders  had  been  issued 
which  were  directly  responsible  for  the  accidents.  It  would  hardly 
be  an  exaggeration  to  say  that,  if  the  courts  had  held  officials  and 
directors  to  as  great  a  degree  of  responsibility  as  employees  for  the 
condition  of  the  property  and  the  actions  of  their  agents,  there  is 
hardly  one  who  would  have  escaped  punishment  for  criminal  negli- 
gence. According  to  the  best  estimates,  approximately  35,000  per- 
sons were  killed  last  year  in  American  industry,  and  at  least  one- 
half  of  these  deaths  were  preventable.2  What  would  be  the  situation 
if  the  courts,  following  the  clear  logic  of  their  own  decisions,  should 
hold  the  stockholders,  directors,  and  officials  criminally  responsible 
for  each  of  the  17,500  preventable  deaths  to  which  attention  has  time 
after  time  been  directed?  > 

That  the  courts,  including  even  the  highest  tribunal  of  the  Nation, 
do  allow  their  economic  bias  to  influence  them  in  holding  laws' uncon- 
stitutional is  nowhere  more  clearly  expressed  than  in  the  dissenting 
opinion  of  Mr.  Justice  Holmes  in  the  case  of  Lochner  v.  New  York,3 
wherein  the  right  of  the  Legislature  of  New  York  to  limit  the  hours 
of  work  in  bakeries  was  involved.  He  said : 

This  case  is  decided  upon  an  economic  theory  which  a  large  part  of  the 
country  does  not  entertain.  If  it  were  a  question  whether  I  agree  with  that 
theory  [limiting  the  consecutive  hours  of  labor  in  bakeries  which  may  be  re- 
quired of  an  employee],  I  should  desire  to  study  it  further  and  long  before 
making  up  my  mind.  But  I  do  not  conceive  that  to  be  my  duty,  because  I 
strongly  believe  that  my  agreement  or  disagreement  has  nothing  to  do  with  the 
right  of  a  majority  to  embody  their  opinions  in  law. 

*  *  *  Some  of  these  laws  [referring  to  several  which  he  has  discussed] 
embody  convictions  or  prejudices  which  judges  are  likely  to  share.  Some  may 
not,  but  a  constitution  is  not  intended  to  embody  a  particular  economic  theory, 
whether  of  paternalism  and  the  organic  relation  of  the  citizen  to  the  State,  or 
of  laissez  faire.  It  is  made  for  people  of  fundamentally  differing  views,  and 
the  accident  of  our  finding  certain  opinions  natural  and  familiar  or  novel,  and 
even  shocking,  ought  not  to  conclude  our  judgment  upon  the  question  whether 
statutes  embodying  them  conflict  with  the  Constitution  of  the  United  States. 

1  Thompson  v.  Thompson,  218  U.  S.,  611. 

2  Industrial  Accident  Statistics,  Bui.  Whole  No.  157,  U,  S.  Bureau  of  Labor  Statistics, 
1915. 

3  Lochner  v.  N.  Y.,  198  TJ.  S.,  45. 


44  BEPOET  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

This  statute  of  the  State  of  New  York,  which  had  been  sustained 
by  the  courts  of  New  York,  was  thus  held  unconstitutional,  we  are 
assured  by  the  highest  possible  authority,  on  the  economic  theories 
of  five  judges,  whose  bias  is  clearly  reflected  in  the  majority  opinion. 
By  that  action  not  only  were  the  bakers  of  New  York  deprived  of  all 
legal  relief  from  the  hardships  of  working  long  hours  in  under- 
ground bakeries,  but  the  entire  movement  for  relieving  the  condition 
of  other  workmen  in  similarly  unhealthful  occupations  throughout 
the  country  was  effectually  checked  for  a  decade.  Can  these  judges, 
the  workers  ask,  absolve  themselves  from  responsibility  for  the 
thousands  of  lives  wrhich  have  been  shortened  as  a  result  of  their 
decisions,  the  ill  health  and  suffering  of  other  thousands  who  con- 
tracted disease  as  a  result  of  unduly  long  exposure  to  bad  conditions 
and  a  lack  of  sufficient  fresh  air  and  leisure  ?  The  provision  of  the 
Constitution  which  was  held  to  be  violated  by  this  act  was  the  four- 
teenth amendment,  designed  solely  to  protect  the  emancipated 
negroes. 

The  wide  range  of  the  labor  laws  declared  unconstitutional  may  be 
seen  from  the  following  list,  which  includes  only  those  cases  which 
may  be  clearly  understood  from  their  titles : 

LABOR  LAWS  DECLARED  UNCONSTITUTIONAL. 

Requiring  statement  of  cause  of  discharge.1 

Prohibiting  blacklisting.2 

Protecting  workmen  as  members  of  labor  unions.3 

Restricting  power  of  courts  to  grant  injunctions,  etc.4 

Protecting  employees  as  voters  (Federal).5 

Forbidding  public  employment  office  to  furnish  names  of  applicants  to  em- 
ployers whose  workmen  were  on  strike.6 

Fixing  rates  of  wages  on  public  works.7 

Regulating  weighing  of  coal  at  mines  (four  States).8 

Providing  for  small  attorneys'  fees  in  successful  actions  to  recover  wage 
claims.' 

Fixing  the  time  of  payment  of  wages.10 

Prohibiting  use  of  "  scrip."  1 

Prohibiting  or  regulating  company  stores." 

Fixing  hours  of  labor  in  private  employment.13 

Defining  liability  of  employers  for  injuries." 

It  is  difficult  to  find  parallel  cases  to  illustrate  the  difference  in 
the  point  of  view  assumed  by  the  courts  upon  the  same  constitutional 
question  according  to  economic  or  social  results  of  the  decisions  in 

1  Wallace  <v.  G.  C.  &  N.  R.  Co.,  94  Ga.,  732. 

2  Wabash  R.  Co.  v.  Young,  162  Ind.,  102. 


State 

' 4  Pierce  v  'stablemen's  Union,  156  Cal.,  70  ;  State  v.  Shepherd,  177  MoM  234  ;  Cheadle  v. 
State,  110  Ind.,  301. 

6  United  States  7\  Amsden,  1  Bissell,  283. 

6  Mathews  v.  People.  202  111.,  389. 

7  Street  v.  Varney  Electrical  Supply  Co.,  160  Ind.,  338. 

8  Harding  v.  People,  160  111.,  459  ;  in  re  Preston,  63  Ohio  St.,  428  ;  Com.  v.  Brown,  8  Pa. 
Super.  Ct.,  339  ;  In  re  House  Bill  No.  203,  21  Colo.,  27. 

»  Randolph  v.  Builders'  and  Painters'  Supply  Co.,  106  Ala.,  501  ;  Builders'  Supply  Depot 
v.  O'Connor,  150  Cal.,  265;  Davidson  v.  Jennings,  27  Colo.,  187;  Manowsky  v.  Stephan, 
233  111.,  409. 

10  Republic  Iron  &  Steel  Co.  v.  State,  160  Ind.,  379 ;  Braceville  Coal  Co.  17.  People,  147  111., 
66  ;  Johnson  v.  Goodyear  Mining  Co.,  127  Cal.,  4. 

11  Godcharles  v.  Wigeman,  113  Pa.  Si.,  431  ;  Jordan  v.  State,  51  Texas  Cr.  App.,  531. 

12  Frorer  v.  People.  141  111.,  171  ;  State  v.  Fire  Creek  Coal  &  Coke  Co.,  33  W.  Va.,  188. 

13  In  re  Morgan,  26  Colo.,  415  ;  Lochner  v.  New  York,  198  U.  S.,  45  ;  Low  u.  Rees  Printing 
Co..  41  Nebr.,  127  ;  Ritchie  v.  People,  155  111.,  98  ;  People  v.  Williams,  189  N.  Y.,  131. 

14  B:illard  v.  Mississippi  Cotton  Oil  Co.,  81  Miss.,  507  ;  Baltimore  &  O.  S.  W.  R.  Co.  v. 
Read,  158  lud.,  L'5. 


KEPOBT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  45 

different  cases.  There  are  a  few  clear-cut  cases,  however,  in  which 
the  contrast  is  plainly  shown,  as,  for  example,  in  the  inconsistency 
between  the  decisions  in  the  Debs  case,1  wherein  it  is  held  that  the 
control  of  Congress  over  interstate  commerce  is  so  complete  that  it 
may  regulate  the  conduct  of  the  employees  engaged  therein  to  the 
extent  of  enjoining  them  from  going  on  a  sympathetic  strike,  and  the 
decision  in  the  Adair  case,2  wherein  it  is  held  that  Congress  has  so 
little  power  over  the  conduct  of  those  engaged  in  interstate  commerce 
that  it  can  not  constitutionally  forbid  employers  engaged  therein 
discharging  their  employees  merely  because  of  membership  in  a 
labor  union. 

In  this  same  connection  it  is  proper  to  contrast  the  almost  uniform 
prohibition  by  the  State  and  Federal  courts  of  secondary  boycotts 
in  labor  cases  even  to  the  extent  of  enjoining  the  publication  of  "  un- 
fair lists,"  with  the  decision  in  the  case  of  Park  Co.  v.  Druggists' 
Association  (175  N.  Y.).  In  this  case  the  Park  Co.  charged  that  the 
Druggists'  Association  fixed  prices  of  proprietary  medicines;  that 
they  refused  to  sell  to  anyone  who  did  not  abide  by  the  prices  thus 
fixed ;  that  the  druggists  combined  in  this  association  refused  to  sell 
to  the  Park  Co. ;  and  that  they  used  spies  to  ascertain  with  whom  the 
Park  Co.  did  business  with  intent  to  compel  such  customers  to  cease 
doing  business  with  the  Park  Co.  The  facts  were  admitted  on  de- 
murrer, but  the  court  refused  to  issue  an  injunction,  holding  that  the 
bo}Tcott  was  caused  by  plaintiff  himself  and  could  be  removed  when- 
ever he  saw  fit  to  abide  by  the  association's  rules ;  and,  further,  that 
there  was  no  conspiracy.  If  the  same  line  of  reasoning  were  fol- 
lowed in  labor  cases,  it  is  difficult  to  imagine  any  kind  of  boycott 
which  would  be  illegal. 

Finally,  reference  should  be  made  to  the  history  of  the  fight  for 
the  enactment  of  eight-hour  legislation  in  Colorado,  which  illustrates 
the  grounds  upon  which  the  workers  not  only  of  that  State,  but 
throughout  the  Nation,  distrust  legislatures,  courts,  and  executive 
officials. 

Although  the  8-hour  day  was  established  in  Colorado  gold  mines 
by  agreement  among  the  operators  after  the  Cripple  Creek  strike 
of  1894,  in  the  coal-mining  industry  a  20-year  struggle  followed  the 
miners'  first  attempt  at  legislation. 

The  eight-hour  bill  presented  to  the  general  assembly  in  1895, 
though  supported  by  the  Western  Federation  of  Miners,  the  United 
Mine  Workers  of  America,  and  labor  organizations  in  general,  was, 
upon  reference  to  the  Supreme  Court  for  an  advance  opinion,  re- 
ported as  unconstitutional  and  failed  of  enactment. 

A  bill  brought  successfully  to  enactment  in  1899,  and  which  was 
substantially  a  copy  of  the  Utah  law  upheld  by  State  and  Federal 
Supreme  Courts,  was  declared  by  the  Colorado  Supreme  Court  to  be 
unconstitutional.3 

In  1901  the  people  adopted  by  an  overwhelming  vote  an  amend- 
ment to  the  constitution  which  provided  for  eight-hour  legislation. 
This  was  followed  by  the  introduction  in  the  next  general  assembly 
(1903)  of  several  bills,  and  by  the  inauguration  of  active  opposition 
thereto  on  the  part  of  corporations.  No  fewer  than  11  anonymous 
bulletins  were  attributed  to  one  officer  of  a  smelting  company. 

1 158  TJ.  S.,  564.  2  208  U.   S.,  161.  3  In  re  Morgan,  26  Colo.,  415. 


46  REPORT  OF   COMMISSION   OK   INDUSTRIAL  RELATIONS. 

On  account  of  disagreements  in  conference,  none  of  the  several 
bills  passed ;  and  so  great  was  the  public  outcry  that  at  the  extra  ses- 
sion in  July,  1903,  each  house  passed  resolutions  blaming  the  other 
for  the  failure. 

In  the  session  of  1904-5  a  bill  substantially  the  same  as  the  present 
law,  and  favored  by  all  political  parties,  was  so  amended  by  Mr. 
Guggenheim  as  to  be  "  absolutely  worthless."  It  remained  on  the 
statute  books,  a  dead  letter,  until  1911. 

In  1911,  house  bill  No.  46  was  passed.  The  operators  succeeded 
in  having  it  submitted  to  a  referendum  vote,  and  at  the  last  moment 
they  initiated  a  smelterman's  eight-hour  bill,  the  two  came  up  on 
the  same  ballot,  and  in  the  succeeding  confusion  both  were  adopted 
by  the  people,  because  of  their  genuine  interest  in  the  passage  of  an 
eight-hour  law. 

The  legislature  of  1913  repealed  both  the  laws  so  enacted  in  1911, 
and  reenacted  house  bill  No.  46,  the  present  law.  By  a  decision  of 
the  Supreme  Court,  allowing  a  "safety  clutch,"  this  law  may  not 
be  referred. 

The  essential  injustice  and  stupidity  of  this  long  fight  of  the  em- 
ployers against  eight-hour  legislation  is  strikingly  shown  by  a  letter 
from  Mr.  L.  M.  Bowers,  chairman  of  the  board  of  directors  of  the 
Colorado  Fuel  &  Iron  Co.,  to  Mr.  J.  D.  Rockefeller,  jr..  stating  that 
after  they  saw  that  such  legislation  was  inevitable,  they  tried  out 
the  eight-hour  day  in  their  mines  and  found  that  it  was  economically 
profitable.  The  Colorado  Fuel  &  Iron  Co.  thereby  is  shown  to  have 
stubbornly  resisted  by  every  conceivable  device,  for  a  period  of  20 
years,  a  just  law  which  was  not  only  necessary  for  the  health  and 
welfare  of  its  12,000  miners  but  was  actually  profitable  for  the  com- 
pany itself. 

The  reason  for  the  effectiveness  of  the  opposition  of  the  Colorado 
Fuel  &  Iron  Co.  is  also  shown  in  the  letter  quoted  on  page  41  from 
Mr.  Bowers  to  the  secretary  of  Mr.  Rockefeller,  describing  the  com- 
plete and  corrupt  control  which  the  company  exercised  over  the 
State  government  during  this  period. 

Third,  it  is  alleged  by  the  workers  that  in  the  administration  of 
law,  both  common  and  statute,  there  is  discrimination  by  the  courts 
against  the  poor  and  in  favor  of  the  wealthy  and  powerful.  It  is 
further  stated  that  this  discrimination  arises  not  only  from  the  eco- 
nomic disabilities  of  the  poor,  which  render  them  unable  to  employ 
equally  skillful  lawyers,  to  endure  the  law's  delay,  and  to  stand  the 
expense  of  repeated  appeals,  but  out  of  an  actual  bias  on  the  part 
of  the  judges  in  favor  of  the  wealthy  and  influential.  It  should 
arouse  great  concern  if  it  be  true  that  the  courts  do  not  resolve  their 
doubts  in  favor  of  the  poor  and  humble;  how  much  graver  then  is 
the  injustice  if  the  judges  do  in  fact  lean  toward  the  rich  and 
mighty  ? 

To  establish  this  claim  by  the  presentation  of  a  sufficient  number 
of  cases  would  be  a  tedious  task.  Many  such  have  been  presented  to 
the  commission  but  can  not  be  considered  fully  here.  Instead,  it 
would  seem  that  in  such  cases  we  may  safely  rely  upon  the  uncon- 
tra dieted  opinion  of  weighty  authorities  whose  position  removes 
from  them  any  suspicion  of  bias. 


BEPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  47 

Ex-President  William  H.  Taft  has  said: 

We  must  make  it  so  that  the  poor  man  will  have  as  nearly  as  possible  an 
equal  opportunity  in  litigating  as  the  rich  man;  and  under  present  conditions, 
ashamed  as  we  may  be  of  it,  this  is  not  the  fact. 

Prof.  Henry  E.  Seager,  of  Columbia  University,  testified  before 
the  commission: 

I  don't  see  how  any  fair-minded  person  can  question  but  what  our  judges 
have  shown  a  decided  bias  in  favor  of  the  employers.  I  would  not  be  inclined 
to  ascribe  this  so  much  to  a  class  bias,  although  I  think  this  is  a  factor,  as  to 
the  antecedent  training  of  judges.  Under  our  legal  system  the  principal  task 
of  the  lawyer  is  to  protect  property  rights,  and  the  property  rights  have  come 
to  be  concentrated  more  and  more  into  the  hands  of  corporations,  so  that  the 
successful  lawyer  of  to-day,  in  a  great  majority  of  cases,  is  the  corporation 
lawyer.  His  business  is  to  protect  the  rights  of  employers  and  corporations. 
It  is  from  the  ranks  of  successful  lawyers,  for  the  most  part,  that  our  judges 
are  selected,  and  from  that  results  inevitably  a  certain  angle  on  the  part  of  a 
majority  of  our  judges. 

The  bias  of  the  courts  is  nowhere  more  clearly  shown  than  in  cases 
involving  persons  and  organizations  with  whose  economic  and  social 
views  the  court  does  not  agree.  An  interesting  example  may  be  cited 
in  the  case  of  Warren  v.  United  States,  183  Fed.,  718,  where  the 
editor  of  Appeal  to  Reason,  Fred  D.  Warren,  was  sentenced  by  the 
Federal  district  court  to  six  months'  imprisonment  and  a  fine  of  $1,500 
for  the  circulation  through  the  mails  of  matter  offering  a  reward  to 
anyone  who  would  kidnap  a  certain  governor  for  whom  extradition 
had  been  refused.1 

The  sentence  was  commuted  by  President  Taft,  against  the  protest 
of  Warren,  to  a  fine  of  $100  to  be  collected  in  a  civil  suit.  In  com- 
menting on  the  sentence,  President  Taft  is  reported  to  have  said : 

The  district  court  evidently  looked  beyond  the  record  of  the  evidence  in  this 
case  and  found  that  Warren  was  the  editor  and  publisher  of  a  newspaper  en- 
gaged in  a  crusade  against  society  and  government. 

Moreover,  this  is  not  a  prosecution  for  criminal  libel ;  it  is  a  prosecution  for 
what  at  best  is  the  violation  of  a  regulation  as  to  the  use  of  the  mails.  To 
visit  such  an  offense  with  a  severe  punishment  is  likely  to  appear  to  the  public 
to  be  an  effort  to  punish  the  defendant  for  something  that  could  not  be  charged 
in  the  indictment. 

This  obviously  was  not  intended  as  a  reflection  upon  the  court, 
but  the  attitude  of  a  large  part  of  the  workers  is  that  if  President 
Taft  was  justified  in  making  such  an  assertion  it  was  a  case  demand- 
ing impeachment  of  the  judges  involved  rather  than  a  commutation 
of  sentence  for  Warren. 

Fourth,  it  is  charged  by  the  representatives  of  labor  not  only  that 
courts  have  neglected  or  refused  to  protect  workers  in  the  rights 
guaranteed  by  the  Constitution  of  the  United  States  and  of  the 
several  States,  but  that  sections  of  the  Constitution  framed  primarily 
to  protect  human  rights  have  been  perverted  to  protect  property 
rights  only  and  to  deprive  workers  of  the  protection  of  rights  se- 
cured to  them  by  statutes. 

First,  with  regard  to  the  Federal  courts,  it  is  startling  and  alarm- 
ing to  citizens  generally,  and  particularly  to  workers,  to  learn  that 
the  concensus  of  Federal  decisions  is  to  the  effect  that  the  sections 
of  the  Constitution  defining  the  rights  of  citizens  to  trial  by  jury, 

1  It  was  alleged  by  Warren  that  this  was  done  to  call  attention  to  the  gross  dis- 
crimination in  the  case  of  Haywood  and  Moyer,  who  were  kidnaped  aud  transported  from 
one  State  to  another. 


48  REPORT  OF   COMMISSION    ON   INDUSTRIAL  RELATIONS. 

security  from  unwarranted  arrest  and  search,  free  speech,  free 
assembly,  writ  of  habeas  corpus,  bearing  of  arms,  and  protection 
from  excessive  bail  and  cruel  and  unusual  punishments,  apply  only 
to  Federal  jurisdiction  and  in  reality  protect  the  citizen  only  against 
the  action  of  the  Federal  Government.  The  only  sections  protect- 
ing the  personal  rights  of  citizens  under  ordinary  circumstances 
are  the  thirteenth  amendment,  prohibiting  involuntary  servitude, 
the  fifteenth,  protecting  the  right  to  vote,  and  the  fourteenth,  pro- 
viding that  "  No  State  shall  make  or  enforce  any  law  which  shall 
abridge  the  privileges  or  immunities  of  citizens  of  the  United  States ; 
nor  shall  any  State  deprive  any  person  of  life,  liberty,  or  property, 
without  due  process  of  law,  nor  deny  any  person  within  its  juris- 
diction the  equal  protection  of  the  laws." 

We  are,  however,  informed  by  counsel  who  has  examined  the  cases 
involved  that  the  fourteenth  amendment  has  had  no  appreciable 
effect  in  protecting  personal  rights.  According  to  the  existing  de- 
cisions, the  due-process  clause  does  not  guarantee  the  right  of  trial 
by  jury,1  nor  does  it  necessitate  indictment  by  grand  juries,2  nor 
has  it  restrained  arbitrary  arrests  and  imprisonment  on  the  part  of 
State  governments  when  men  are  kidnaped  in  one  State  and  carried 
to  another.3 

Up  to  1911  the  United  States  Supreme  Court  intervened  in  55  cases 
in  which  the  fourteenth  amendment  was  invoked.  In  39  of  these 
cases  .private  corporations  were  the  principal  parties.  Thirty-two 
statutes  were  affected  by  these  decisions,  and  in  only  three,  concern- 
ing the  civil  rights  of  negroes,  were  the  personal  rights  of  individual 
citizens  involved.  With  the  exceptions  involving  the  rights  of 
negroes  in  jury  cases  (e.  g.,  Strauder  v.  West  Virginia,  100  U.  S., 
303),  the  fourteenth  amendment  has  not  acted  to  secure  or  protect 
personal  rights  from  State  encroachment,4  but  only  to  prevent  en- 
croachment on  property  rights.5  In  all  the  other  numerous  cases  in 
which  the  fourteenth  amendment  was  invoked  to  protect  personal 
rights,  the  attempt  failed. 

On  the  other  hand  there  is  abundant  evidence  of  the  great  protec- 
tion which  it  affords  corporations  and  other  forms  of  organized 
capital.  On  that  point  we  may  quote  the  statements  of  Mr.  C.  W. 
Collins,  of  the  Alabama  bar,  who  analyzed  the  decisions  of  the  United 
States  Supreme  Court  through  the  October,  1910,  term.6 

Private  corporations  are  using  it  as  a  means  to  prevent  the  enforcement  of 
State  laws.  Since  1891  a  majority  of  cases  under  the  amendment  have  involved 
a  corporation  as  the  principal  party.  *  *  *  The  increase  of  this  kind  of 
litigation  runs  parallel  to  the  rise  of  the  trust  movement  in  America.  At  the 
1909-10  term  of  the  court,  out  of  a  total  of  26  opinions  rendered  under  the 
amendment  20  involved  a  corporation  as  the  principal  party. 

*  *     *     The  fourteenth  amendment  is  the  easiest  of  all  constitutional  meas- 
ures to  invoke.     In  a  country  where  economic  activity  is  so  intense  and  time 
so  vital  an  element,  it  has  been  grasped  as  a  sure  measure  of  delay,  with  always 
the  possibility   of  obtaining  affirmative   relief.     The   amendment,   though    in- 
tended primarily  as  a  protection  to  the  negro  race,  has  in  these  latter  days  be- 

1  Maxwell  v.  Dow,  176  TL  S.,  581  ;  Walker  v.  Sauvinet,  92  U.  S.,  90. 

2  Hurtaclo  v.  California,  119  U.  S.,  516. 

s  He  Pettibone,  12  Idaho,  264  ;  203  U.  S.,  192  ;  Re  Moyer,  35  Colo.,  150  ;  140  F.  R., 
870  ;  203  U.  S.,  221 ;  Re  Boyle,  6  Idaho,  609. 

*  See  for  illustration  :  Virginia  v.  Rives.  100  TJ.  S.,  313  ;  Plessy  v.  Ferguson,  163  U.  S., 
537  ;  Twining  v.  New  Jersey,  211  U.  S.,  78  ;  Brown  v.  N6w  Jersey,  175  U.  S.,  172. 

6  See  for  illustration:  C.   M.  &   St.   P.  Ry.   v.   Minnesota,   134   11.    S.,   418;   Cotting  v. 
K.  C.  Stockyards  Co.,  183  TJ.  S.,  79  ;  G.  C.  &  S.  F.  Ry.  v.  Ellis,  168  U.  S.,  150. 
6  The  Fourteenth  Amendment  and  the  States,  C.  W.  Collins. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  49 

come  a  constitutional  guaranty  to  the  corporations  that  no  State  action  to- 
ward them  can  become  effective  until  after  years  of  litigation  through  the 
State  and  Federal  courts  to  the  Supreme  Court  of  the  United  States.  The 
course  of  the  amendment  is  running  away  from  its  originally  intended  channel 
(p.  145). 

The  fourteenth  amendment,  although  a  humanitarian  measure  in  origin  and 
purpose,  has  been  within  recent  years  practically  appropriated  by  the  corpora- 
tions. It  was  aimed  at  restraining  and  checking  the  powers  of  wealth  and 
privilege.  It  was  to  be  a  charter  of  liberty  for  human  rights  against  property 
rights.  The  transformation  has  been  rapid  and  complete.  It  operates  to-day 
to  protect  the  rights  of  property  to  the  detriment  of  the  rights  of  man.  It  has 
become  the  Magna  Charta  of  accumulated  and  organized  capital  (p.  137). 

It  is  thus  quite  clear  that  the  fourteenth  amendment  not  only  nas 
failed  to  operate  to  protect  personal  rights  but  has  operated  almost 
wholly  for  the  protection  of  the  property  rights  of  corporations. 
These  facts  taken  in  conjunction  with  the  many  decisions,  such  as 
the  Lochner  case,1  in  which  the  fourteenth  amendment  has  been 
invoked  to  annul  statutes  designed  to  better  conditions  of  life  and 
work,  must  constitute  just  ground  for  grave  concern  not  only  to  the 
workers  but  to  every  citizen  who  values  his  liberty. 

With  the  "bills  of  rights"  contained  in  the  constitutions  of  the 
several  States,  the  situation,  as  far  as  the  workers  are  concerned,  is 
somewhat  different,  since  in  many  jurisdictions  these  have  been  used 
upon  numerous  occasions  to  afford  substantial  protection  to  them  in 
their  personal  rights.  The  workers  call  attention  particularly,  how- 
ever, to  the  long  list  of  statutes,  city  ordinances,  and  military  orders 
abridging  freedom  of  speech  and  press,  which  not  only  have  not 
been  interfered  with  by  the  courts  but  whenever  tested  have  almost 
uniformly  been  upheld  by  the  State  and  Federal  courts.2  They 
point  also  to  the  grave  injuries  done  to  workers  individually  and 
collectively  by  the  thousands  of  arrests  which  have  been  made  with- 
out just  cause  in  labor  disputes,  without  relief  from  either  the  courts 
or  the  executive;  to  the  denial  of  the  right  to  the  writ  of  habeas 
corpus  upon  numerous  occasions;  to  the  fact  that  where,  as  for  ex- 
ample, in  Los  Angeles,  San  Diego,  and  Fresno  (Cal.),  Spokane 
(Wash.),  Minot  (N.  Dak.),  Paterson  (N.  J.),  Little  Falls  (N.  Y.), 
Lawrence  (Mass.),  Idaho,  Colorado,  and  West  Virginia,  workers 
have  been  grievously  injured,  brutally  treated,  or  interfered  with  in 
the  pursuit  of  their  guaranteed  rights  by  other  classes  of  citizens  or 
by  officials,  the  courts  have  not  interfered  and  the  perpetrators  have 
gone  unpunished. 

On  the  general  question  of  martial  law  and  habeas  corpus  a  mem- 
ber of  the  staff  has  made  an  elaborate  comparison  of  the  cases  aris- 
ing- from  nonlabor  disturbances  with  the  cases  arising  from  labor 
disturbances.  It  is  not  necessary,  and  would  require  too  much  space, 
to  recite  these  cases  in  full,  but  among  the  former  may  be  mentioned 
the  Milligan  case,  and  other  cases  arising  in  the  State  courts  of  Indi- 
ana, Illinois,  Kentucky,  North  Carolina,  and  Wisconsin 3  (all  during 
or  immediately  following  the  Civil  War),  and  three  cases  in  the 
courts  of  Kentucky,  Ohio,  and  Oklahoma  since  that  time ; 4  among 

1  Lochner  v.  N.  Y.,  198  U.  S.,  45. 

2  Fox  v.  Washington,  236  U.  S..  273  ;  Fitts  v.  Atlanta,  121  Ga.,  267  ;  Ex  parte  Thomas, 
102  Pacific,  19. 

3  In   re   Milligan,   4   Wall.    (U.    S.),   2;    Skeen    v.   Monkeimer,   21    Ind.,    1;   Johnson   v. 
Jones,   44   111.,    142 ;    Corbin   v.   Marsh,   2   Dur.,    193 ;    Ex   parte   Moore,   64   N.   C.f    802 ; 
In  re  Kemp,  16  Wis.,  382. 

4  Franks  v.  Smith,  142  Ky.,  232  ;  Ohio  v.  Coit,  8  Ohio,  62  ;  Fluke  v.  Canton,  31  Okla.,  718. 

38819°— 16 4* 


50  BEPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

the  latter,  i.  e.,  those  arising  from  labor  disturbances,  are  included 
the  cases  from  Colorado,  Idaho,  Montana,  Pennsylvania,  and  West 
Virginia.1  The  results  of  such  comparison  are  summarized  in  part 
as  follows: 

Although  uniformly  held  that  the  writ  of  habeas  corpus  can  only  be  sus- 
pended by  the  legislature,  in  these  labor  disturbances  the  executive  has  in  fact 
suspended  or  disregarded  the  writ.  In  the  labor  cases  the  judiciary  either 
disregards  the  fact  that  the  writ  has  been  suspended  by  the  executive  or  evades 
the  issue.  In  nonlabor  cases  the  courts  have  protested  emphatically  when  the 
executive  attempted  to  interfere  with  the  writ  of  habeas  corpus. 

In  many  instances  in  which  the  military  has  been  in  active  operation  be- 
cause of  nonlabor  disturbances,  the  judiciary  has  almost  without  exception  pro- 
tested against  the  exercise  of  any  arbitrary  power  and  has  almost  uniformly 
attempted  to  limit  that  power. 

In  cases  arising  from  labor  agitations,  the  judiciary  has  uniformly  upheld 
the  power  exercised  by  the  military,  and  in  no  case  has  there  been  any  pro- 
test against  the  use  of  such  power  or  any  attempt  to  curtail  it,  except  in  Mon- 
tana, where  the  conviction  of  a  civilian  by  military  commission  was  annulled. 

Finally,  it  is  impossible  to  imagine  a  more  complete  mockery  of 
justice  and  travesty  upon  every  conception  of  fair  dealing  than  the 
innumerable  decisions  holding  unconstitutional  wise  and  salutary 
laws  for  the  protection  of  workers,  upon  the  ground  that  they  vio- 
late the  right  of  contract,  even  while  the  workers,  whose  rights  are 
supposed  to  be  affected,  clamor  for  the  maintenance  of  the  statute. 
The  appeal  for  the  protection  of  the  workers'  rights  in  such  cases 
comes  invariably  from  the  employers,  and  is  urged  against  the  pro- 
test of  the  workers,  yet  in  almost  unbroken  succession  the  judges  sol- 
emnly nullify  the  wisest  acts  of  legislatures  on  just  such  specious, 
self-serving  pleas.  There  are  notable  cases  in  which  the  judges  have 
unmasked  the  mummery,  as,  for  example,  in  Holden  v.  Hardy,2  where 
it  was  said: 

Although  the  prosecution  in  this  case  was  against  the  employer  of  labor,  who, 
apparently,  under  the  statute,  is  the  only  one  liable,  his  defense  is  not  so  much 
that  his  right  to  contract  has  been  infringed  upon,  but  that  the  act  works  a 
peculiar  hardship  to  his  employees,  whose  right  to  labor  as  long  as  they  please 
is  alleged  to  be  thereby  violated.  The  argument  would  certainly  come  with 
better  grace  and  greater  cogency  from  the  latter  class. 

There  appear  to  be  no  reported  cases  in  which  the  workers  have 
urged  that  their  rights  are  violated  by  such  restrictive  legislation, 
which  in  fact  invariably  originates  with  them;  but  the  courts  con- 
tinue to  hand  down  decisions  "  protecting  the  sacred  right  of  con- 
tract of  the  worker,"  when  the  only  person  benefited  is  the  employer, 
who  is  thus  able  to  "  turn  the  very  Constitution  itself  into  an  instru- 
ment of  inequality." 

This  entire  situation  is  fraught  with  such  grave  dangers  not  only 
to  the  workers  but  to  all  citizens  who  value  their  individual  liberty, 
that  the  Nation  can  not  be  entirely  secure  until  those  fundamental 
rights  are  affirmatively  guaranteed  to  every  citizen  of  the  United 
States  by  the  Federal  Government.  It  is  therefore  earnestly  recom- 
mended that  Congress  forthwith  initiate  an  amendment  to  the  Con- 
stitution securing  these  rights  against  encroachment  by  Federal, 
State,  or  local  governments  or  by  private  persons  and  corporations. 

Fifth.  It  is  charged  that  the  ordinary  legal  machinery  provides 
no  adequate  means  whereby  laborers  and  other  poor  men  can  secure 

1  In  re  Moyer,  35  Colo..  159  ;  in  re  Boyle,  6  Idaho,  609  ;  In  re  McDonald.  49  Mont., 
455;   Com.  v.   Shortall,  206  Pa.,   165;   Mays  and  Nance  v.   Brown,  71   W.  Va.,   519;   Ex 
parte  Jones,  71   W.  Va.,  567. 

2  169  U,  S.,  366. 


BEPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  51 

redress  for  wrongs  inflicted  upon  them  through  the  nonpayment  of 
wages,  through  overcharges  at  company  stores,  through  exorbitant 
hospital  and  other  fees,  fines,  and  deductions  through  fraud  on  the 

Eart  of  private  employment  offices,  loan  offices,  and  installment 
ouses,  and  through  the  "  grafting  "  of  foremen  and  superintendents. 
The  losses  to  wage  earners  from  these  sources  are  stated  to  amount 
each  year  to  millions  of  dollars  and  to  work  untold  hardship  on  a 
class  of  men  who  can  ill  afford  to  lose  even  a  penny  of  their  hard- 
won  earnings. 

These  charges  were  thoroughly  investigated  in  all  parts  of  the 
country  by  an  experienced  member  of  the  commission's  staff. 

He  cites,  for  example,  that  in  California,  where  the  situation  has 
been  more  completely  uncovered  than  elsewhere  and  where  remedies 
are  beginning  to  be  applied,  during  the  year  ending  June,  1914, 
9.621  claims  were  presented  to  the  commissioner  of  labor  alone.  Of 
these,  7,330  were  for  nonpayment  of  wages,  of  which  4,904  were  suc- 
cessfully settled  and  $110.912  of  unpaid  wages  was  collected.  This  is 
believed  to  have  been  only  a  small  proportion  of  the  total  claims  of 
laborers  throughout  the  State,  inasmuch  as  the  number  of  claims  was 
growing  rapidly  as  the  work  of  the  bureau  became  better  known, 
and  because,  during  a  period  of  only  10  months,  over  2,200  claims 
were  presented  to  the  State  commission  on  immigration  and  hous- 
ing. The  work  of  handling  these  claims  and  making  its  existence 
known  to  laborers  throughout  the  State  was  just  getting  well  under 
way,  although  with  a  small  appropriation  and  inadequate  force, 
when  the  collection  of  wage  claims  was  suddenly  checked  by  a  de- 
cision of 'the  State  court  of  appeals1  that  the  payment-of- wages  law 
was  unconstitutional  on  the  ground  that  since  it  provided  for  fine 
or  imprisonment  where  the  wages  of  laborers  were  illegally  retained, 
it  was  in  effect  a  provision  for  imprisonment  for  debt. 

The  investigation  in  other  States  revealed  equally  bad  or  worse 
conditions,  while  in  all  except  a  few  no  efficient  means  existed  by 
which  these  claims  could  be  prosecuted.  In  conclusion,  our  investi- 
gator reported : 

(a)  The  existing  labor  and  life  conditions  of  common  laborers  in 
this  country  produce  immense  numbers  of  justified  labor  complaints 
and  claims,  involving  not  only  great  sums  of  money  in  the  aggre- 
gate but  untold  personal  hardship  and  suffering. 

(Z>)  The  existing  public  and  private  legal  institutions  are  utterly 
inadequate  to  secure  justice  to  the  laborers  in  the  matter  of  these 
complaints  and  claims. 

(c)  This  situation  has  already  created  in  the  laborers  distrust  of 
the  Government,  of  employers,  and  of  the  well-to-do  classes  gener- 
ally, and  is  one  of  the  contributory  causes  of  the  existing  industrial 
unrest. 

The  measures  recommended,  which  have  to  do  largely  with  State 
and  local  administrations,  are  discussed  on  page  89.  It  is  sug- 
gested, however,  that  the  commission  recommend  to  Congress  that, 
inasmuch  as  the  immigrant  laborers,  who  suffer  most  largely  from 
these  injustices,  are  ethically  and  legally  wards  of  the  Nation  until 
they  become  citizens,  the  Bureau  of  Immigration  of  the  Federal 
Department  of  Labor  should  be  given  the  authority  and  necessary 

!Nov.   23,    1914. 


52  REPORT  OF  COMMISSION   ON  INDUSTRIAL  EELATIONS. 

appropriations  to  establish,  wherever  it  may  seem  necessary,  in  con- 
nection with  its  existing  offices  in  all  parts  of  the  country,  legal  aid 
divisions  which  would  freely  and  aggressively  prosecute  these  claims 
and  complaints  on  behalf  of  the  immigrant  laborers,  and,  if  there 
are  no  constitutional  or  statutory  barriers,  on  behalf  also  of  Ameri- 
can citizens. 

Sixth.  It  is  charged  by  the  workers  that  the  courts,  by  the  unwar- 
ranted extension  of  their  powers  in  the  issuance  of  injunctions,  have 
not  only  grievously  injured  the  workers  individually  and  collectively 
upon  innumerable  occasions  but  have,  by  the  contempt  procedure 
consequent  upon  disobedience  to  such  injunctions,  deprived  the  work- 
ers of  the  right,  fundamental  to  Anglo-Saxon  institutions,  to  be  tried 
by  jury. 

This  charge  is  not  limited  to  members  of  trades-unions,  nor  to  work- 
ers, but  is  voiced  also  by  many  who  have  no  reason  for  partisanship. 
For  example,  Mr.  S.  S.  Gregory,  former  president  of  the  American 
Bar  Association,  testified  before  the  commission : 

These  injunctions  are  based  upon  the  theory  that  the  man  carrying  on  a  busi- 
ness has  a  certain  sort  of  property  right  in  the  good  will  or  the  successful  con- 
duct of  that  business;  and  that  when  several  hundred  or  several  thousand 
excited  men  gather  around  his  premises  where  he  carries  his  business  on  and 
threaten  everybody  that  comes  in  there  to  work,  and  possibly  use  violence,  that 
that  is  such  an  unlawful  interference  with  property  right  as  may  be  the  subject 
of  protection  in  equity.  And  that  view  of  the  law  has  been  sustained  by  the 
courts  of  practically  all  the  States. 

But  the  great  difficulty  about  this  was  this,  that  having  enjoined  defendants, 
namely,  striking  workmen,  perhaps  from  unlawful  interference  with  the  busi- 
ness of  the  employer,  where  that  unlawful  interference  consisted  in  an  attack 
or  an  assault  and  battery  upon  another  man,  to  wit,  perhaps  a  strikebreaker 
so-called,  or  one  who  was  hired  to  take  the  place  of  one  of  the  striking  work- 
men, that  thereafter  the  judge  who  had  ordered  the  injunction  and  whose 
authority  had  been  thus  defied,  was  permitted  to  put  the  person  charged  with 
the  breach  of  that  injunction  upon  trial  upon  a  charge  of  contempt,  really  for 
having  committed  an  unlawful  and  criminal  act. 

Now  the  Constitution  has  thrown  around  the  prosecution  of  criminals  (the 
Constitutions,  State  and  Federal)  a  number  of  securities.  They  are  entitled 
to  trial  by  jury ;  they  are  entitled  to  be  confronted  by  the  witnesses  who  are  to 
testify  against  them ;  they  are  entitled  to  be  heard  by  counsel. 

But  none  of  those  guaranties  except  perhaps  the  right  to  be  heard  by  counsel 
is  secured  in  contempt  proceedings ;  and  the  obvious  wisdom  of  permitting  12 
men  drawn  from  the  body  of  the  people  to  pass  on  questions  of  fact — men  who 
are  supposed  to  be  prejudiced  neither  for  nor  against  the  parties,  who  know 
nothing  about  the  case  until  they  are  sworn  in  the  jury  box — has  so  far  com- 
mended itself  to  the  wisdom  of  legislators  and  jurists  to  such  a  degree  that  it 
has  become  a  permanent  feature  of  our  jurisprudence ;  and  to  provide  that  the 
court  may  proceed  against  parties  for  contempt,  where  the  conduct  charged 
against  them  is  criminal,  is  really  an  evasion  of  the  constitutional  guaranties 
and  a  plain  attempt  to  commit  to  equity  jurisdiction  over  matters  which  it  has 
been  decided  over  and  over  again  by  all  the  courts  that  it  has  no  jurisdiction 
with  respect  to,  namely,  the  administration  of  the  criminal  law. 

For  instance,  I  might  receive,  as  I  leave  the  room  of  this  tribunal  to-day,  a 
threatening  letter  from  somebody  saying  they  were  going  to  kill  me  for  some- 
thing I  had  said,  or  had  not  said,  before  the  commission.  Now,  that  involves 
personal  loss  possibly  to  my  wife  or  those  dependent  upon  me ;  but  no  court  of 
equity  would  listen  for  a  moment  to  a  bill  I  should  file  saying  "A  B  "  or  some 
other  blackhand  gentleman  had  threatened  to  kill  me,  or  if  filed  by  anybody 
dependent  upon  me,  and  therefore  there  should  be  an  injunction  to  prevent  him 
from  killing  me.  That  would  be  an  absurdity — a  legal  absurdity ;  and  none  the 
less  is  it  so  where  a  man  is  enjoined  from  committing  acts  of  violence  in  a 
strike  to  try  him  for  contempt,  without  a  trial  by  jury.  And  that  has  been  an 
injustice  that  has  rankled  in  the  minds  of  everybody  that  has  been  a  victim 
of  it,  and  justly  so. 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  53 

Sir  Charles  Napier  says,  "People  talk  about  agitators,  but  the  only  real 
agitator  is  injustice ;  and  the  only  way  is  to  correct  the  injustice  and  allay  the 
agitation." 

Judge  Walter  Clark,  chief  justice  of  the  Supreme  Court  of  North 
Carolina,  also  testified  before  the  commission  as  follows: 

Chairman  WALSH.  Have  you  studied  the  effect  of  the  use  of  injunctions  in 
labor  disputes  generally  in  the  United  States,  as  a  student  of  economics  and 
the  law? 

Judge  CLAKK.  I  do  not  think  they  can  be  justified,  sir,  *  *  *  [Their 
effect]  has  been,  of  course,  to  irritate  the  men,  because  they  feel  that  in  an 
Anglo-Saxon  community  every  man  has  a  right  to  a  trial  by  jury,  and  that  to 
take  him  up  and  compel  him  to  be  tried  by  a  judge  is  not  in  accordance  with 
the  principles  of  equality,  liberty,  and  justice. 

Chairman  WALSH.  Do  you  think  that  has  been  one  of  the  causes  of  social 
unrest  in  the  United  States? 

Judge  CLAKK.  Yes,  sir ;  and  undoubtedly  will  be  more  so,  unless  it  is  remedied. 

It  is  not  within  the  province  of  the  commission  to  attempt  to  decide 
the  question  of  whether  or  not  the  issuance  of  such  injunctions  is  an 
unwarranted  extension  upon  the  part  of  the  courts ;  but  the  weighty 
opinions  cited  above  are  very  impressive  and  are  convincing  that  the 
workers  have  great  reason  for  their  attitude.  It  is  known,  however, 
from  the  evidence  of  witnesses  and  from  the  information  collected  by 
the  staff,  that  such  injunctions  have  in  many  cases  inflicted  grievous 
injury  upon  workmen  engaged  in  disputes  with  their  employers,  and 
that  their  interests  have  been  seriously  prejudiced  by  the  denial  of 
jury  trial,  which  every  criminal  is  afforded,  and  by  trial  before  the 
judge  against  whom  the  contempt  was  alleged. 

It  is  felt  to  be  a  duty,  therefore,  to  register  a  solemn  protest  against 
this  condition,  being  convinced  of  its  injustice  not  only  by  reason  of 
the  evil  effects  which  have  resulted  from  this  procedure,  but  by 
virtue  of  a  conviction  that  no  person's  liberty  can  safely  be  decided 
by  any  one  man,  particularly  when  that  man  is  the  object  of  the 
alleged  contempt. 

The  Clayton  Act  undoubtedly  contains  many  features  which  will 
relieve  this  situation  as  far  as  the  Federal  courts  are  concerned,  but 
it  seems  clear  that  it  does  not  contain  anything  like  a  complete  solu- 
tion of  the  existing  injustices,  even  for  the  limited  field  of  Federal 
jurisdiction. 

Seventh,  it  is  charged  by  the  representatives  of  labor  that  laws  de- 
signed for  the  protection  of  labor  in  workshops  and  mines  and  on 
railroads  are  not  effectively  enforced,  except  in  a  few  States.  This 
is  a  matter  of  considerable  moment  to  labor,  but  it  is,  after  all,  re- 
garded by  the  workers,  since  it  concerns  chiefly  only  their  safety  and 
comfort,  as  ranking  far  below  the  other  matters  discussed,  which  in- 
volve primarily  their  liberty  and  rights  as  freemen  and,  secondarily, 
their  only  means  of  bettering  their  condition.  Moreover,  it  is  almost 
entirely  a  matter  of  administration,  which  is  discussed  in  detail  else- 
where in  the  report.  With  the  great  attention  which  the  method  of 
administration  is  now  receiving,  not  only  from  labor  organizations 
but  from  civic  organizations,  and  lately  even  from  employers'  asso- 
ciations, it  is  likely  to  reach  a  satisfactory  stage  before  very  long. 

Eighth,  it  is  charged  that  in  cases  involving  industrial  questions, 
the  workers  are  liable  to  great  injustice  by  reason  of  the  fact  that  in 
many  localities  they  are  excluded  from  juries  either  by  the  qualifica- 
tions prescribed  (usually  payment  of  property  tax)  or  by  the  method 
of  selection. 


54  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

In  California,  for  example,  it  was  testified  that  grave  injustice 
had  heen  done  in  many  cases  because  the  juries  (composed  only  of 
property  owners,  for  the  most  part  employers)  were  greatly  prej- 
udiced against  the  defendants,  whose  program,  if  successful,  would 
directly  or  indirectly  affect  the  interests  of  the  jurors. 

Similarly,  in  Cook  County,  111.,  which  includes  Chicago,  it  was 
found  by  a  committee  of  the  Lawyers'  Association  of  Illinois  that 
although  the  system  of  selection  by  commissioners  was  intended  to 
produce  an  impartial  selection  from  all  classes  of  the  community, 
out  of  probably  1,000  different  occupations  in  Cook  County  the 
commissioners  confine  the  selection  of  the  great  bulk  of  the  jurors 
to  the  following  10  occupations:  Managers,  superintendents,  fore- 
men, presidents  and  owners  of  companies,  secretaries  of  companies, 
merchants,  agents,  salesmen,  clerks,  and  bookkeepers. 

To  quote  from  the  report : 

There  are  76,000  mechanics  affiliated  with  the  Building  Trades  Council  in 
Chicago,  yet  in  the  3,440  jurors  investigated  by  your  committee  there  are  only 
200  mechanics  drawn  from  the  76,000  in  the  Building  Trades  Council. 

There  are  about  200,000  mechanics  belonging  to  the  different  labor  organiza- 
tions in  Chicago,  yet  there  are  only  about  350  mechanics  drawn  as  jurors  by 
the  commissions  in  the  3,440  investigated,  or  about  10  per  cent,  when  the  per- 
centage ought  to  be  about  70  per  cent. 

The  report  of  the  committee  adds: 

Another  comparison  will  show  that  out  of  these  3,440  jurors  the  commission 
took  only  314  jurors  from  130  different  occupations,  or  an  average  of  less  than  3 
jurors  from  each  occupation,  while  from  the  10  favored  occupations  mentioned 
above,  1,723  jurors  were  picked,  or  the  grossly  excessive  average  of  172  from 
each  of  said  10  occupations.1 

A  similar  situation  was  disclosed  by  the  investigations  of  members 
of  the  staff  in  Paterson,  N.  J. 

Finally,  there  is  the  very  grave  situation  where,  by  putting  aside 
the  legal  and  customary  methods,  the  jury  is  chosen  by  the  sheriff 
or  other  officers,  who  may  be  unduly  influenced  by  either  party  to 
the  case.  Such  a  situation,  inimical  in  the  extreme  to  the  interests 
of  the  workers,  has  been  conclusively  proved  to  have  existed  in  Colo- 
rado and  in  other  mining  districts. 

In  the  belief  that  the  right  to  trial  by  an  impartial  jury  is  neces- 
sary for  the  maintenance  of  justice,  and  that  such  impartiality  can 
be  secured  only  by  including  all  classes  of  citizens,  it  is  suggested 
that  the  commission  recommend  that  Federal  and  States  statutes 
should  be  passed  providing  for  the  creation  of  juries  by  drawing 
the  names  from  a  wheel,  or  other  like  device,  which  shall  contain  the 
name  of  every  qualified  voter  in  the  district  from  which  the  jury  is 
to  be  selected.  The  adoption  of  this  method  in  Missouri  and  other 
States  has  resulted  uniformly  in  securing  impartial  juries  of  much 
higher  grade,  and  has  also  eliminated  almost  entirely  the  sources  of 
corruption  attending  the  selection  of  juries. 

Ninth,  it  is  charged  by  the  workers  that,  during  strikes,  innocent 
men  are  in  many  cases  arrested  without  just  cause,  charged  with 
fictitious  crimes,  held  under  excessive  bail,  and  treated  frequently 
with  unexampled  brutality  for  the  purpose  of  injuring  the  strikers 
and  breaking  the  strike. 

In  support  of  this  charge,  the  commission  has  been  furnished  with 
evidence  showing  that  in  a  number  of  recent  strikes  large  numbers 

1  Eternal  Vigilance  is  the  Price  of  Liberty.  Report  of  committee  to  the  Lawyers' 
Association  of  Illinois,  1914. 


KEPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  55 

of  strikers  were  arrested,  but  that  only  a  small  number  were  brought 
to  trial  and  relatively  few  were  convicted  of  any  serious  offense; 
that  those  arrested  were,  as  a  rule,  required  to  give  heavy  bail,  far 
beyond  their  means,  or  were  detained  without  trial  until  their  effec- 
tiveness as  strikers  was  destroyed;  and  that  in  many  cases  strikers 
were  brutally  treated  by  the  police  or  by  special  deputies  in  the  pay 
of  the  companies.  A  number  of  these  strikes  have  been  investigated 
by  public  hearings  of  the  commission,  by  members  of  its  staff,  or  by 
other  departments  of  the  Federal  Government.  In  each  of  the  strikes 
investigated  the  charges  as  made  were  in  essentials  substantiated. 

In  Paterson,  N".  J.,  which  was  investigated  with  unusual  thorough- 
ness and  which,  because  of  its  size  and  its  location  in  the  most 
densely  populated  section,  might  be  considered  likely  to  be  free  from 
such  abuses,  it  was  found  that  during  the  strike  of  the  silk  workers 
2,238  arrests,  charging  unlawful  assembly  or  disorderly  conduct, 
were  made,  and  that  in  all  there  were  300  convictions  in  the  lower 
courts.  Men  arrested  for  unlawful  assembly  were  held  in  bail  of 
$500  to  $5,000.  The  right  of  trial  by  jury  was  generally  denied. 
Men  were  arrested  for  ridiculous  reasons,  as,  for  example,  for  stand- 
ing on  the  opposite  side  of  the  street  and  beckoning  to  men  in  the 
mills  to  come  out.  This  was  the  allegation  on  which  the  charge  of 
unlawful  assembly  was  placed  against  four  men,  and  for  which  they 
were  sent  to  jail  in  default  of  $500  bail,  and,  although  never  indicted, 
the  charges  still  stand  against  them  as  a  bar  to  their  rights  as  citizens 
and  voters.  Men  were  fined  arbitrarily,  as  in  the  case  of  one  who 
was  fined  $10  for  permitting  strikers  to  sit  on  a  bench  in  front  of  his 
house.  Not  more  than  $25  worth  of  damage  was  done  during  the 
entire  strike,  involving  25,000  workers,  and  there  was  no  actual 
violence  or  attempt  at  violence  on  the  part  of  the  strikers  during  the 
entire  strike.  Under  such  conditions  the  editor  of  a  local  paper  was 
arrested,  charged  with  criminal  libel,  for  comparing  the  conditions 
in  Paterson  with  the  rule  of  Cossacks;  and  four  men  who  sold  the 
paper  on  the  streets  also  were  arrested.  The  editor  was  tried  and 
convicted  in  the  lower  court,  but  the  verdict  was  set  aside  by  the 
Supreme  Court,  while  the  four  men,  after  being  held  several  days 
in  default  of  bail,  were  released  without  trial. 

It  is  impossible  to  summarize  the  activities  of  the  police  and  au- 
thorities during  this  strike  better  than  by  referring  to  the  testimony 
of  two  of  the  leading  citizens  of  Paterson,  who  said  that  they  had 
resolved  to  get  rid  of  the  "  agitators "  and  were  ready  to  go  beyond 
the  law  to  accomplish  their  purpose.1  A  full  appreciation  of  the 

1  In  a  letter  recently  received  from  one  of  these  witnesses  his  position  is  reiterated 
with  a  striking  illustration  of  inability  to  comprehend  the  fundamental  principles  of 
American  Government  and  the  limitations  imposed  upon  the  power  of  one  class  to 
oppress  another  : 

"  Another  point  which  is  only  partially  covered  in  my  testimony  is  in  regard  to  what 
Chairman  Walsh  endeavored  to  get  me  and  various  other  citizens  to  admit  would  be  an 
infraction  of  free  speech  and  personal  liberty  if  the  agitators  were  prevented  from  coming 
into  Paterson  or  not  permitted  to  hold  their  meetings  here.  The  United  States  Govern- 
ment puts  up  the  bars  at  Ellis  Island  against  certain  classes  of  '  undesirable  citizens,' 
and  as  far  as  I  have  been  able  to  learn  the  Government's  action  in  debarring  from  this 
country  the  immoral  and  criminal  class  and  those  who  would  become  a  charge  on  the 
country  meets  with  the  approval  of  the  Americans  generally.  If  it  is  proper  and  right  for 
the  United  States  Government  to  say  who  shall  and  who  shall  not  enter  this  country  I 
think  it  is  equally  proper  for  the  city  of  Paterson  to  debar  undesirable  citizens  who  are 
coming  here  to  sow  discontent  and  cause  trouble  in  the  city.  New  York  City  has  had  a 
dead  line  at  Fulton  Street  for  a  great  many  years  and  the  police  authorities  have  pre- 
vented certain  persons  from  crossing  that  line,  and  this  has  been  considered  a  proper 
exercise  of  the  police  powers  of  the  city.  I  can  see  no  difference  between  this  action  on 
the  part  of  the  New  York  authorities  and  similar  action  which  was  desired  by  many  of 
our  citizens  in  Paterson  in  regard  to  the  I.  W.  W.  agitators." 


56  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

injustice  committed  during  this  strike  can  be  secured  only  by  read- 
ing the  testimony  taken  at  Paterson  and  the  reports  of  the  com- 
mission's investigators  based  upon  the  records  of  the  police  and  the 
courts. 

In  Los  Angeles  and  Indianapolis  essentially  the  same  conditions 
were  found  by  the  commission,  while  in  McKees  Rocks,  Bethlehem, 
and  Westmoreland  County,  Pa.,  Lawrence,  Mass.,  and  Calumet, 
Mich.,  investigated  by  the  Federal  Department  of  Labor,  essentially 
the  same  conditions  of  injustice  were  found  to  prevail.  The  condi- 
tions in  West  Virginia  and  Colorado,  which  were  almost  beyond 
belief  and  had  the  additional  feature  of  military  rule,  will  be  dis- 
cussed elsewhere.  > 

An  examination  of  the  entire  mass  of  evidence  is  convincing  that 
such  conditions  are  in  fact  typical  of  strikes  which  are  serious  enough 
to  arouse  the  authorities,  especially  where  the  workers  are  unor- 
ganized before  the  strike  and  therefore  lacking  in  influence  in  the 
community. 

Tenth,  it  is  asserted  by  the  workers  that  in  many  localities  during 
strikes  not  only  is  one  of  the  greatest  functions  of  the  State,  that  of 
policing,  virtually  turned  over  to  employers  or  arrogantly  assumed 
by  them,  but  criminals  employed  by  detective  agencies  and  strike- 
breaking agencies  are  clothed,  by  the  process  of  deputization,  with 
arbitrary  power  and  relieved  of  criminal  liability  for  their  acts. 

Only  three  such  cases  are  cited  here,  though  the  commission  has  in 
its  records  evidence  regarding  a  considerable  number.  At  Roosevelt, 
N.  J.,  it  was  found  by  the  commission's  investigators  and  later  con- 
firmed in  court  that  the  office  of  sheriff  was  virtually  turned  over  to 
one  Jerry  O'Brien,  the  proprietor  of  a  so-called  detective  agency; 
that  he  imported  a  number  of  men  of  bad  reputation  and  clothed 
them  with  the  authority  of  deputies;  and  that  on  January  19,  1915, 
these  criminals,  without  provocation,  wantonly  shot  and  killed  2 
men  and  wounded  17  others  who  were  on  strike  against  the  American 
Agricultural  Chemical  Co.,  which  paid  and  armed  the  deputies. 

Similarly,  during  the  Calumet,  Mich.,  strike,  about  230  men  were 
imported  from  detective  agencies  in  eastern  cities,  52  under  pay  from 
the  county  board  of  supervisors,  which  was  made  up  almost  entirely  of 
copper  company  officials.  The  actions  of  these  men  were  so  wantonly 
brutal  that  they  were  censured  by  the  local  judge,  but  they  went 
unchecked  in  their  career  of  arrogant  brutality,  which  culminated  in 
their  shooting,  without  provocation,  into  a  house  in  which  women 
and  children  were,  killing  two  persons  and  wounding  two  others. 

The  recent  strike  in  Bayonne,  N.  J.,  threw  more  light  on  these 
armed  guards.  During  this  strike  one  of  the  New  York  detective 
agencies  furnished  for  the  protection  of  the  Tidewater  Oil  Co.'s 
plant  men  who  were  so  vicious  and  unreliable  that  the  officials  of 
the  company  themselves  say  that  their  presence  was  sufficient  to  incite 
a  riot.  These  men  shot  without  provocation  at  anyone  or  everyone 
who  came  within  sight,  and  the  killing  of  at  least  three  strikers  in 
Bayonne  and  the  wounding  of  many  more  is  directly  chargeable  to 
these  guards. 

The  character  of  the  men  who  make  a  specialty  of  this  kind  of 
employment  has  never  been  more  frankly  described  than  in  the  testi- 
mony of  Mr.  L.  M.  Bowers,  chairman  of  the  board  of  directors  of 


REPORT  OF   COMMISSION    ON   INDUSTRIAL  RELATIONS.  57 

the  Colorado  Fuel  &  Iron  Co.,  who  repeatedly  referred  to  those  in 
the  employ  of  that  company  as  "  cutthroats,"  against  whose  charac- 
ter, he  stated,  he  had  frequently  protested. 

According  to  the  statement  of  Berghoff  Bros.  &  Waddell,  who 
style  themselves  "labor  adjusters"  and  who  do  a  business  of  strike 
breaking  and  strike  policing,  there  are  countless  men  who  follow  this 
business  at  all  times.  They  say  they  can  put  10,000  armed  men  into 
the  field  inside  of  72  hours.  The  fact  that  these  men  may  have  a 
criminal  record  is  no  deterrent  to  their  being  employed,  and  no  check 
can  be  made  on  the  men  sent  out  by  these  companies  on  hurry  calls. 

When  the  question  of  providing  the  bail  for  these  men  arose  as  a 
result  of  the  killing  of  the  strikers  at  Bayonne,  the  company  attor- 
ney actually  declined  to  furnish  bail  for  them  on  the  ground  that 
they  were  thugs  of  whom  the  company  knew  nothing  and  that  it 
would  not  be  responsible  for  their  appearance. 

In  view  of  the  endless  crimes x  committed  by  the  employees  of  the 
so-called  detective  agencies,  who  have  been  permitted  to  usurp  a  func- 
tion that  should  belong  only  to  the  State,  it  is  suggested  that  the  com- 
mission recommend  to  Congress  either  that  such  of  these  agencies  as 
may  operate  in  more  than  one  State,  or  may  be  employed  by  cor- 
porations engaged  in  interstate  commerce,  or  may  use  the  mails,  shall 
be  compelled  to  take  out  a  Federal  license,  with  regulations  to  insure 
the  character  of  their  employees  and  the  limitation  of  their  activities 
to  the  bona  fide  business  of  detecting  crime,  or  that  such  agencies 
shall  be  utterly  abolished  through  the  operation  of  the  taxing  power 
or  through  denying  them  the  use  of  the  mails. 

Eleventh.  It  is  charged  that  in  many  localities  the  entire  system 
of  civil  government  is  suspended  during  strikes  and  there  is  set  up 
in  its  place  a  military  despotism  under  so-called  martial  law. 

In  West  Virginia,  for  example,  during  the  strike  of  coal  miners 
in  1912  martial  law  was  declared  and  the  writ  of  habeas  corpus 
denied,  in  the  face  of  a  direct  prohibition  by  the  constitution  of  the 
State,  in  spite  of  the  fact  that  the  courts  were  open  and  unobstructed, 
and  without  reference  to  the  protests  of  the  strikers.  Persons  out- 
side the  military  zone  were  arrested,  dragged  before  military  courts, 
tried  and  sentenced  under  so-called  martial  law.  Upon  appeal  to 
the  civil  courts  of  the  State  the  actions  of  the  military  authorities 
were  upheld,  in  spite  of  the  oath  of  the  judges  to  support  the  consti- 
tution, which  in  terms  provided  "  that  no  citizen,  unless  engaged  in 
the  military  service  of  the  State,  shall  be  tried  or  punished  by  any 
military  court  for  any  offense  that  is  cognizable  by  the  civil  courts 
of  the  State,"  and,  further,  "  The  privilege  of  the  writ  of  habeas 
corpus  shall  not  be  suspended." 

The  decisions  of  the  court  stirred  Hon.  Edgar  M.  Cullen,  a  former 
chief  judge  of  the  Court  of  Appeals  of  New  York — a  witness  before 
this  commission  and  recognized  as  unusually  conservative  and  care- 
ful in  his  utterances — to  make  the  following  statements: 

Tinder  these  decisions  the  life  and  liberty  of  every  man  within  the  State 
would  seem  to  be  at  the  mercy  of  the  governor.  He  may  declare  a  state  of  war, 
whether  the  facts  justify  such  a  declaration  or  not,  and  that  declaration  is  con- 
clusive upon  the  courts. 

1  See  the  reports  of  congressional  committees  which  investigated  the  Homestead  strike, 
the  Pullman  strike,  and  the  recent  strikes  in  Colorado  and  West  Virginia. 


58  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

If  he  declares  only  a  portion  of  the  State  to  be  in  a  state  of  war,  under  the 
decision  in  the  second  case  a  person  in  any  other  part  of  the  State,  however 
distant,  may  be  arrested  and  delivered  to  the  military  authorities  in  the 
martial  zone,  and  his  fate,  whether  liberty  or  life,  depends  on  the  action  of  a 
military  commission,  for  I  know  of  no  principle  which  authorizes  a  military 
commission  to  impose  the  punishment  of  imprisonment  that  would  not  equally 
authorize  the  imposition  of  the  punishment  of  death.  Under  that  doctrine, 
should  armed  resistance  to  the  Federal  authority  justifying  a  suspension  of 
the  writ  of  habeas  corpus  occur  in  Arizona  a  citizen  could,  on  a  charge  of 
aiding  the  insurrection,  be  dragged  from  his  home  in  Maine  and  delivered  to 
the  military  authorities  in  Arizona  for  trial  and  punishment. 

The  remedy  suggested  by  the  learned  court,  of  impeachment  by  the  legisla- 
ture, would  hardly  seem  of  much  efficacy.  By  impeachment  the  governor 
could  only  be  removed  from  office.  He  could  not  be  further  punished,  however 
flagrant  his  opposition  may  have  been,  except  by  a  perversion  of  the  criminal 
law,  for  if  the  doctrine  of  the  courts  is  correct  he  would  not  have  exceeded  his 
legal  power. 

The  governor  might  imprison  or  execute  the  members  of  the  legislature,  or 
even  the  learned  judges  of  the  supreme  court  themselves.1 

The  attention  of  the  commission  has  also  been  directed  by  wit- 
nesses to  the  repeated  occurrence  of  similar  or,  if  possible,  more  ex- 
treme conditions  in  Colorado  and  Idaho,  which  testimony  has  been 
confirmed  either  by  the  investigations  and  hearings  of  the  commis- 
sion or  by  the  reports  of  responsible  officials  of  the  Federal  Govern- 
ment. In  Colorado  martial  law  has  been  in  effect  ten  times  since 
1894.  Similarly  in  Idaho  martial  law  has  been  in  effect  on  several 
occasions.  In  both  of  these  States  not  only  have  strikers  been  impris- 
oned by  military  courts,  but  thousands  have  been  held  for  long 
periods  in  u  bull  pens,"  hundreds  have  been  forcibly  deported  from 
the  State,  and  so  arrogant  have  the  troops  become  upon  occasions 
that  they  have  refused  to  obey  the  mandates  of  the  civil  courts, 
although  the  constitutions  of  both  States  provide  that  the  military 
shall  always  be  in  strict  subordination  to  the  civil  power.2  In  fact, 
on  one  occasion  at  least^  when  orders  of  the  court  for  the  production 
of  prisoners  had  been  ignored  and  the  military  officers  were  sum- 
moned before  the  court,  they  surrounded  the  courthouse  with  in- 
fantry and  cavalry,  came  into  court  accompanied  by  soldiers  with 
fixed  "bayonets,  and  stationed  a  gatling  gun  in  a  position  command- 
ing the  courthouse.2  During  the  recent  strike  in  Colorado  the  mili- 
tary was  supreme  and  wielded  its  arbitrary  power  despotically  and  at 
times  brutally. 

i  .  Twelfth,  it  is  charged  by  the  workers  that  in  some  localities  the 
control  by  the  employers  of  the  entire  machinery  of  government  is 
so  great  that  lawless  acts  on  the  part  of  agents  of  the  employers  go 
imheeded  and  unpunished,  while  vindictive  action  against  the 
leaders  of  the  strike  is  accomplished  by  methods  unparalleled  in 
civilized  countries.  It  is  seldom  that  evidence  sufficient  to  substan- 
tiate such  sweeping  charges  can  be  secured,  even  if  the  charges  are 
true;  but  in  the  testimony  and  documents  which  have  been  gathered 
by  the  commission  there  seems  to  be  conclusive  proof  that  in  one 
State  at  least,  Colorado,  such  a  condition  of  complete  domination  of 
the  State  government  has  prevailed  and,  it  would  seem,  does  still 
prevail. 

1  Address  before  New  York  State  Bar  Association,  1014. 
*  Constitution  of  Colorado  I,  .">::.     Constitution  of  Idaho  I,  12. 

8  See  report  of  U.'S.  Commissioner  of  Labor,  Carroll  1).  \Vright,  on  Labor  Disturbances 
in  Colorado  for  a  detailed  history  of  events  up  to  and  including  1904. 


KEPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  59 

First,  Hon.  Frederick  Farrar,  attorney  general  of  Colorado,  tes- 
tified in  substance  as  follows: 

As  a  result  of  a  personal  investigation  into  conditions  in  Las  Animas  and 
Huerfano  Counties,  Colo.,  in  the  summer  of  1913,  a  very  perfect  political 
machine  was  found  to  exist.  The  head  of  this  political  machine  is  the  sheriff, 
and  it  is  conducted  along  lines  very  similar  to  those  maintained  by  corrupt 
political  organizations.  It  has  a  system  of  relief  in  case  of  need,  and  a  system 
of  giving  rewards  to  its  people.  It  was  difficult  to  determine  which  was  cause 
and  which  effect,  but  there  was  undoubtedly  some  relationship  between  the 
political  machine  and  the  coal  companies.  Witness  believes  the  machine  ex- 
isted through  its  power  as  a  machine  over  the  coal  companies,  but  has  no 
knowledge  of  any  money  being  used.  His  investigation  did  not  lead  into 
question  of  whether  the  machine  controlled  coroners'  juries  in  cases  of  death 
from  accidents  in  mines,  etc.,  or  of  whether  mining  laws  were  obeyed. 

Second,  Hon.  Thomas  M.  Patterson,  formerly  United  States  Sen- 
ator, testified : 

The  men  employed  by  the  large  mining  companies  have  been  used  to  gain 
political  power.  There  is  no  doubt  that  it  is  the  deliberate  purpose  of  these 
companies  to  control  the  officials  of  the  counties  in  which  they  are  operating, 
and  to  have  a  great  influence  in  the  selection  of  judges  and  in  the  constitution 
of  the  courts.  In  this  purpose  they  have  been  successful.  Election  returns 
from  the  two  or  three  counties  in  which  the  large  companies  operate  show 
that  in  the  precincts  in  which  the  mining  camps  are  located  the  returns  are 
nearly  unanimous  in  favor  of  the  men  or  measures  approved  by  the  companies, 
regardless  of  party.  The  companies  know  whom  they  want  elected,  and  do  not 
hesitate,  judging  from  the  results,  to  make  it  known. 

Third,  State  Senator  Helen  Ring  Robinson  testified  in  substance 
as  follows; 

As  a  member  of  the  committee  of  privileges  and  elections,  which  investi- 
gated conditions  in  Las  Animas  County,  she  listened  for  three  weeks  to  the 
story  of  political  conditions  there.  Long  before  the  strike  was  ordered  she 
realized  that  the  industrial  situation  was  hopeless  because  the  political  situ- 
ation appeared  hopeless. 

"  I  found  that  while  the  counties  of  Las  Animas  and  Huerfano  are  geographi- 
cally a  part  of  Colorado,  yet  industrially  and  politically  they  are  a  barony  or  a 
principality  of  the  Colorado  Fuel  &  Iron  Co.  Such  situations,  of  course,  must 
mean  a  knitting  together  of  the  industrial  and  political  situation,  and  I  don't 
wish  to  say  that  the  Colorado  Fuel  &  Iron  Co.  have  limited  their  efforts  to  Las 
Animas  and  Huerfano  Counties.  If  that  were  so,  the  situation  in  the  State 
itself  would  not  be  so  seriously  affected  by  them;  but  they  have  in  time  past 
reached  out  beyond  the  boundaries  of  their  principality  and  made  and  unmade 
governors;  men  who  desire  positions  of  high  place  in  Colorado  would  be  very 
loath  to  antagonize  them  whether  they  lived  in  Las  Animas  or  Routt  County,  or 
in  Denver,  and  it  would  not  matter  in  that  case  to  which  political  party  they 
belonged." 

Attention  should  be  called  to  another  aspect  of  the  control  of  the 
machinery  of  government  by  one  class  for  the  oppression  of  another. 
The  scales  of  justice  have  in  the  past  swung  far  in  one  direction- 
legislatures,  courts,  and  administrative  officers  under  the  domination 
of  corporations  have  grievously  wronged  the  workers.  There  is 
grave  danger  that,  if  the  workers  assert  their  collective  power  and 
secure  the  control  of  government  by  the  massing  of  their  numbers, 
the  scales  may  swing  equally  far  in  the  other  direction  and  every  act 
of  injustice,  every  drop  of  blood,  every  moment  of  anguish,  be  repaid 
in  full,  not  upon  some  obscure  and  humble  worker,  but  upon  those 
who  now  glory  in  the  sense  of  boundless  power  and  security. 

In  the  few  cases  in  which  the  workers  have  momentarily  secured 
control  of  local  situations,  they  have  followed  the  examples  that 


60  REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

have  been  set  and  have  in  many  instances  used  their  power  unjustly 
and  oppressively.  In  Colorado,  for  example,  during  the  strikes  in 
the  metal  mines,  where  the  Western  Federation  of  Miners  controlled 
a  camp,  they  followed  the  example  of  the  operators  and  deported 
persons  whom  they  deemed  to  be  obnoxious.  Similarly,  during  the 
fight  between  two  factions  of  the  Western  Federation  of  Miners  in 
Butte,  Mont.,  the  dominant  faction  forced  several  persons  to  leave, 
the  city  and  set  aside  the  ordinary  processes  of  law.  It  is  inevitable 
that  this  should  be  the  case,  and  it  is  remarkable  only  that  the  masses 
of  workers,  even  when  acting  as  mobs,  show  greater  self-restraint 
than  do  organizations  made  up  of  business  men  ordinarily  regarded 
as  upright,  respectable,  and  admirable  citizens. 

For  the  security  and  honor  of  the  Nation  the  scales  of  justice 
must  be  brought  to  a  stable  equilibrium.  This  can  be  accomplished 
only  by  a  realization  by  every  citizen  that  every  act  of  injustice, 
whether  done  in  far-off  States  or  at  one's  very  door,  whether  affect- 
ing a  friend  or  an  enemy,  is  in  its  consequences  an  invasion  of  one's 
own  security  and  a  menace  to  one's  liberty. 

There  is  reason,  however,  to  expect  that  no  sober  and  well-consid- 
ered action  for  the  removal  of  these  abuses  will  be  taken,  and  one 
may,  without  being  an  alarmist,  share  the  fears  expressed  by  Judge 
Seymour  D.  Thompson  :x 

The  dangerous  tendencies  and  extravagant  pretensions  of  the  courts  which 
I  have  pointed  out  ought  not  to  be  minimized,  but  ought  to  be  resisted.  Their 
resistance  ought  not  to  take  place  as  advised  by  Jefferson,  by  "  meeting  the 
invaders  foot  to  foot,"  but  it  ought  to  take  place  under  the  wise  and  moderate 
guidance  of  the  legal  profession,  but  the  danger  is  that  the  people  do  not 
always  so  act.  In  popular  governments  evils  are  often  borne  with  stolid 
patience  until  a  culminating  point  is  reached,  when  the  people  burst  into  sudden 
frenzy  and  redress  their  grievances  by  violent  and  extreme  measures,  and  even 
tear  down  the  fabric  of  government  itself.  There  is  danger,  real  danger,  that 
the  people  will  see  at  one  sweeping  glance  that  all  the  powers  of  their  Govern- 
ment, Federal  and  State,  lie  at  the  feet  of  us  lawyers,  that  is  to  say,  at  the  feet 
of  a  judicial  oligarchy ;  that  those  powers  are  being  steadily  exercised  in  behalf 
of  the  wealthy  and  powerful  classes,  and  to  the  prejudice  of  the  scattered  and 
segregated  people;  that  the  power  thus  seized  includes  the  power  of  amend- 
ing the  Constitution;  the  power  of  superintending  the  action,  not  merely  of 
Congress,  but  also  of  the  State  legislatures ;  the  power  of  degrading  the  powers 
of  the  two  Houses  of  Congress,  in  making  those  investigations  which  they  may 
deem  accessory  to  wise  legislation,  to  the  powers  which  an  English  court  has 
ascribed  to  British  colonial  legislatures;  *  *  holding  that  a  venal  legis- 
lature, temporarily  vested  with  power,  may  corruptly  bargain  away  those 
essential  attributes  of  sovereignty  and  for  all  time;  that  corporate  franchises 
bought  from  corrupt  legislatures  are  sanctified  and  placed  forever  beyond 
recall  by  the  people ;  that  great  trusts  and  combinations  may  place  their  yokes 
upon  the  necks  of  the  people  of  the  United  States,  who  must  groan  forever 
under  the  weight,  without  remedy  and  without  hope ;  that  trial  by  jury  and  the 
ordinary  criminal  justice  of  the  States,  which  ought  to  be  kept  near  the  people, 
are  to  be  set  aside,  and  Federal  court  injunctions  substituted  therefor;  that 
those  injunctions  extend  to  preventing  laboring  men  quitting  their  employ- 
ment, although  they  are  liable  to  be  discharged  by  their  employers  at  any  time, 
thus  creating  and  perpetuating  a  state  of  slavery.  There  is  danger  that  the 
people  will  see  these  things  all  at  once;  see  their  enrobed  judges  doing  their 
thinking  on  the  side  of  the  rich  and  powerful;  see  them  look  with  solemn 
cynicism  iipon  the  sufferings  of  the  masses,  nor  heed  the  earthquake  when  it 
begins  to  rock  beneath  their  feet ;  see  them  present  a  spectacle  not  unlike  that 
of  Nero  fiddling  while  Rome  burns.  There  is  danger  that  the  people  will  see 
all  this  at  one  sudden  glance,  and  that  the  furies  will  then  break  loose  and  that 
all  hell  will  ride  on  their  wings. 

1  Address  before  State  Bar  Association  of  Texas,   1896. 


EEPOET  OF   COMMISSION"   ON"   INDUSTEIAL  KELATIONS.  61 

It  is  true  that  Judge  Thompson  spoke  19  years  ago,  but  the  real 
clanger  lies  in  the  fact  that  during  that  period  we  have  done  little  to 
remove  the  evils  cited  by  him,  and  that  there  is  even  reason  to  fear 
that  we  have  simply  moved  nearer  to  the  danger  line  instead  of  away 
from  it. 

In  considering  the  action  which  needs  to  be  taken  it  has  been  urged 
by  some  that  the  end  to  be  achieved  is  to  place  personal  rights  on  a 
parity  w^ith  property  rights.  It  is  necessary  to  render  a  firm  protest 
and  warning  against  the  acceptance  of  such  an  ideal.  The  establish- 
ment of  property  rights  and  personal  rights  on  the  same  level  can 
leave  only  a  constant  and  ever-growing  menace  to  our  popular  insti- 
tutions. With  the  acceptance  of  such  an  ideal  our  democracy  is 
doomed  to  ultimate  destruction.  Personal  rights  must  be  recognized 
as  supreme  and  of  unalterable  ascendency  over  property  rights. 

Relief  from  these  grave  evils  can  not  be  secured  by  petty  reforms. 
The  action  must  be  drastic  and  directed  at  the  roots  from  which  these 
evils  spring. 

With  full  recognition  of  the  gravity  of  the  suggestions,  it  seems 
necessary  to  urge  the  commission  to  make  the  following  recom- 
mendations : 

1.  That  Congress  forthwith  initiate  an  amendment  to  the  Consti- 
tution providing  in  specific  terms  for  the  protection  of  the  personal 
rights  of  every  person  in  the  United  States  from  encroachment  by 
the  Federal  and  State  Governments  and  by  private  individuals,  asso- 
ciations, and  corporations.     The  principal  rights  which  should  be 
thus  specifically  protected  by  the' power  of  the  Federal  Government 
are  the  privilege  of  the  writ  of  habeas  corpus,  the  right  to  jury  trial, 
to  free  speech,  to  peaceful  assemblage,  to  keep  and  bear  arms,  to  be 
free  from  unreasonable  searches  and  seizures,  to  speedy  public  trial, 
and  to  freedom  from  excessive  bail  and  from  cruel  and  unusual  pun- 
ishments. 

2.  That  Congress  immediately  enact  a  statute  or,  if  deemed  neces- 
sary, initiate  a  constitutional  amendment,  specifically  prohibiting  the 
courts  from  declaring  legislative  acts  unconstitutional. 

3.  That  Congress  enact  that  in  all  Federal  cases  where  the  trial  is 
by  jury,  all  qualified  voters  in  the  district  shall  be  included  in  the 
list  from  which  jurors  are  selected,  and  that  they  shall  be  drawn  by 
the  use  of  a  wheel  or  other  device  designed  to  promote  absolute  im- 
partiality. 

4.  That  Congress  drastically  regulate  or  prohibit  private  detective 
agencies  doing  business  in  more  than  one  State,  employed  by  a  com- 
pany doing  an  interstate  business,  or  using  the  mails  in  connection 
with  their  business.     Such  regulation,  if  it  is  feasible,  should  include 
particularly  the  limitation  of  their  activities  to  the  bona  fide  func- 
tions of  detecting  crime,  and  adequate  provision  should  be  made  for 
the  rigid  supervision  of  their  organization  and  personnel. 

4.     DENIAL,  OF  THE  RIGHT  OF  ORGANIZATION. 

The  previous  discussion  of  the'causes  of  industrial  unrest  has  dealt 
with  the  denial  of  certain  fundamentals  to  which  the  workers  believe 
they  have  natural  and  inalienable  rights,  namely,  a  fair  distribution 
of  the  products  of  industry,  the  opportunity  to  earn  a  living,  free 
access  to  unused  land  and  natural  resources,  and  just  treatment  by 


62  EEPOET  OF   COMMISSION   OX  INDUSTRIAL  KELATIONS. 

legislators,  courts,  and  executive  officials.  A  more  serious  and  funda- 
mental charge  is,  however,  contained  in  the  allegation  by  the  workers 
that  in  spite  of  the  nominal  legal  right  which  has  been  established  by 
a  century-long  struggle,  almost  insurmountable  obstacles  are  placed 
in  the  way  of  their  using  the  only  means  by  which  economic  and 
political  justice  can  be  secured,  namely,  combineo^  action  through  vol- 
untary organization.  The  workers  insist  that  this  right  of  organiza- 
tion is  fundamental  and  necessary  for  their  freedom,  and  that  it  is 
inherent  in  the  general  rights  guaranteed  every  citizen  of  a  democ- 
racy. They  insist  that  "  people  can  free  themselves  from  oppression 
only  by  organized  force.  No  people  could  gain  or  maintain  their 
rights  or  liberties  acting  singly,  and  any  class  of  citizens  in  the  State 
subject  to  unjust  burdens  or  oppression  can  gain  relief  only  by 
combined  action." 

The  demand  for  organization  and  collective  action  has  been  mis- 
understood, it  is  claimed,  because  of  the  belief  among  a  large  number 
of  citizens  that  its  purpose  was  simply  to  secure  better  wages  and 
better  physical  conditions.  It  has  been  urged.,  however,  by  a  large 
number  of  witnesses  before  the  commission  that  this  is  a  complete 
misconception  of  the  purposes  for  which  workers  desire  to  form 
organizations.  It  has  been  pointed  out  with  great  force  and  logic 
that  the  struggle  of  labor  for  organization  is  not  merely  an  attempt 
to  secure  an  increased  measure  of  the  material  comforts  of  life,  but  is 
a  part  of  the  age-long  struggle  for  liberty;  that  this  struggle  is 
sharpened  by  the  pinch  of  hunger  and  the  exhaustion  of  body  and 
mind  by  long  hours  and  improper  working  conditions ;  but  that  even 
if  men  were  well  fed  they  would  still  struggle  to  be  free.  It  is  not 
denied  that  the  exceptional  individual  can  secure  an  economic  suffi- 
ciency either  by  the  sale  of  his  unusual  ability  or  talent  or  by  syco- 
phantic subservience  to  some  person  in  authority,  but  it  is  insisted 
that  no  individual  can  achieve  freedom  by  his  own  efforts.  Simi- 
larly, while  it  is  admitted  that  in  some  cases  exceptional  employers 
treat  their  employees  with  the  greatest  justice  and  liberality,  it  is 
held  to  be  a  social  axiom  that  no  group  of  workers  can  become  free 
except  by  combined  action,  nor  can  the  mass  hope  to  achieve  any 
material  advance  in  their  condition  except  by  collective  effort. 

Furthermore,  it  is  urged  by  the  representatives  of  labor  that  the 
efforts  of  individuals  who  are  bent  upon  bettering  their  own  condi- 
tion without  reference  to  their  health  or  to  the  interests  of  others 
directly  injure  each  of  their  fellow  workers  and  indirectly  weaken  the 
whole  fabric  of  society. 

It  is  also  pointed  out  that  the  evolution  of  modern  industry  has 
greatly  increased  the  necessity  for  organization  on  the  part  of  wage 
earners.  While  it  is  not  admitted  that  the  employer  who  has  only 
one  employee  is  on  an  economic  equality  with  the  person  who  is 
employed  by  him,  because  of  the  fact  that  the  employer  controls  the 
means  of  livelihood,  which  gives  him  an  almost  incalculable  advan- 
tage in  an}'  bargain,  nevertheless  this  condition  of  inequality  is  held 
to  have  been  enormously  increased  by  the  development  of  corpora- 
tions controlling  the  livelihood  of  hundreds  of  thousands  of  em- 
ployees and  by  the  growth  of  employers'  associations  whose  members 
act  as  a  unit  in  questions  affecting  their  relations  with  employees. 

There  have  been  many  able  and  convincing  expositions  of  this 
belief  by  witnesses  before  the  commission,  but  there  is  no  other  which 


BEPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  63 

seems  to  have  so  completely  covered  the  entire  field  as  the  testimony 
of  Mr.  Louis  D.  Brandeis,  who,  as  he  stated,  has  studied  this  problem 
from  the  standpoint  both  of  employers  and  of  employees : 

My  observation  leads  me  to  believe  that  while  there  are  many  single  things — 
single  causes — contributing  causes  to  unrest,  that  there  is  one  cause  which  is 
fundamental,  and  it  is  the  necessary  conflict  between — the  contrast  between — 
our  political  liberty  and  the  industrial  absolutism. 

We  are  as  free  politically,  perhaps,  as  it  is  possible  for  us  to  be.  Every  man 
has  his  voice  and  his  vote,  and  the  law  has  endeavored  to  enable,  and  has  suc- 
ceeded practically  in  enabling,  him  to  exercise  his  political  franchise  without 
fear.  He,  therefore,  has  his  part,  and  he  certainly  can  secure  an  adequate  part 
of  the  government  of  the  country  in  all  of  its  political  relations — in  all  rela- 
tions which  are  determined  by  legislation  or  governmental  administration. 
On  the  other  hand,  in  dealing  with  industrial  problems  the  position  of  the 
ordinary  worker  is  exactly  the  reverse.  And  the  main  objection,  as  I  see  it,  to 
the  large  corporation  is  that  it  makes  possible— and  in  many  cases  makes  in- 
evitable— the  exercise  of  industrial  absolutism.  It  is  not  merely  the  case  of 
the  individual  worker  against  employer,  which,  even  if  he  is  a  reasonably 
sized  employer,  presents  a  serious  situation  calling  for  the  interposition  of 
a  union  to  protect  the  individual.  But  we  have  the  situation  of  an  employer 
so  potent,  so  \vell  organized,  with  such  concentrated  forces  and  with  such  ex- 
traordinary powers  of  reserve  and  the  ability  to  endure  against  strikes  and 
other  efforts  of  a  union,  that  the  relatively  loosely  organized  masses  of  even 
strong  unions  are  unable  to  cope  with  the  situation. 

We  are  dealing  here  with  a  question  not  of  motive,  but  of  condition.  Now, 
the  large  corporations  and  the  managers  of  the  large  corporations — of  the 
powerful  corporations — are  probably,  in  a  large  part,  actuated  by  motives  just 
the  same  as  an  employer  of  one-tenth  of  their  size.  Neither  of  them,  as  a 
rule,  wishes  to  have  his  liberty  abridged ;  but  the  smaller  concern  usually  comes 
to  the  conclusion  that  it  is  necessary  that  it  should  be  where  there  is  an  im- 
portant union  found.  But  when  you  have  created  a  great  power,  when  there 
exist  these  powerful  organizations  who  can  afford — not  only  can  successfully 
summon  forces  from  all  parts  of  the  country — to  use  tremendous  amounts  of 
money  in  any  conflict  to  carry  out  what  they  deem  to  be  their  business  prin- 
ciples, you  have  necessarily  a  condition  of  inequality  between  the  two  con- 
tending forces.  The  result  is  that  contests,  doubtless  undertaken  with  the  best 
of  motives  and  with  strong  convictions  of  what  is  for  the  best  interests  not 
only  of  the  company  but  of  the  community,  leads  to  absolutism.  In  all  cases 
of  these  large  corporations  the  result  has  been  to  develop  a  benevolent  abso- 
lutism— an  absolutism  all  the  same ;  and  it  is  that  which  makes  the  great  corpo- 
ration so  dangerous.  It  is  because  you  have  created  within  the  State  a  state 
so  powerful  that  the  ordinary  forces  existing  are  insufficient  to  meet  it. 

Now,  to  my  mind  the  situation  of  the  worker  that  is  involved — and  I  noted, 
Mr.  Chairman,  that  when  you  put  the  question  you  put  the  question  of  physical 
condition — unrest,  in  my  mind,  never  can  be  removed,  and,  fortunately  never 
can  be  removed  by  the  mere  improvement  of  the  physical  and  material  con- 
ditions of  the  working  man.  If  it  were  we  should  run  great  risk  of  improving 
their  material  conditions  and  reducing  their  manhood.  We  must  bear  in  mind 
all  the  time  that  however  much  we  may  desire  material  improvement  and 
must  desire  it  for  the  comfort  of  the  individual,  we  are  a  democracy ;  and  that 
we  must  have  above  all  things  men ;  and  it  is  the  development  of  manhood  to 
which  any  industrial  and  social  system  must  be  directed.  We  are  committed 
not  only  to  social  justice  in  the  sense  of  avoiding  things  which  bring  suffering 
and  harm  and  unequal  distribution  of  wealth,  but  we  are  committed  primarily 
to  democracy,  and  the  social  justice  to  which  we  are  headed  is  an  incident  of 
our  democracy,  not  an  end  itself.  It  is  the  result  of  democracy,  but  de- 
mocracy we  must  have.  And,  therefore,  the  end  to  which  we  must  move  is  a 
recognition  of  industrial  democracy  as  the  end  to  which  we  are  to  work,  and 
that  means  this:  It  means  that  the  problems  are  not  any  longer,  or  to  be 
any  longer,  the  problems  of  the  employer.  The  problems  of  his  business — it  is 
not  the  employer's  business.  The  union  can  not  shift  upon  the  employer  the 
responsibility  for  the  conditions,  nor  can  the  employer  insist  upon  solving, 
according  to  his  will,  the  conditions  which  shall  exist ;  but  the  problems  which 
exist  are  the  problems  of  the  trade ;  they  are  the  problems  of  the  employer  and 
the  employee.  No  possible  degree  of  profit  sharing,  however  liberal,  can  meet 


64  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

the  situation.  That  would  be  again  merely  dividing  the  proceeds  of  business. 
That  might  do  harm  or  it  might  do  good,  dependent  on  how  it  is  applied. 

No  mere  liberality  in  the  division  of  the  proceeds  of  industry  can  meet  this 
situation.  There  must  be  a  division  not  only  of  the  profits,  but  a  division  of 
the  responsibilities;  and  the  men  must  have  the  opportunity  of  deciding,  in 
part,  what  shall  be  their  condition  and  how  the  business  shall  be  run.  They 
also,  as  a  part  of  that  responsibility,  must  learn  that  they  must  bear  the  results, 
the  fatal  results,  of  grave  mistakes,  just  as  the  employer.  But  the  right  to 
assist  in  producing  the  results,  the  right,  if  need  be,  the  privilege  of  making 
mistakes,  is  a  privilege  which  can  not  be  denied  to  labor,  just  as  we  must  insist 
on  their  sharing  the  responsibilities  for  the  result  of  the  business. 

Now,  to  a  certain  extent  we  get  that  result — are  gradually  getting  it — in 
smaller  businesses.  The  grave  objection  to  the  large  business  is  that  almost 
inevitably,  from  its  organization,  through  its  absentee  stockholdership,  through 
its  remote  directorship,  through  the  creation  practically  of  stewards  to  take 
charge  of  the  details  of  the  operation  of  the  business  and  coming  into  direct 
relation  with  labor,  we  lose  that  necessary  cooperation  which  our  own  aspira- 
tions— American  aspirations — of  democracy  demand.  And  it  is  in  that,  in  my 
opinion,  that  we  will  find  the  very  foundation  of  the  unrest;  and  no  matter 
what  is  done  with  the  superstructure,  no  matter  how  it  may  be  improved  one 
way  or  the  other,  unless  we  reach  that  fundamental  difficulty,  the  unrest  will 
not  only  continue,  but  in  my  opinion  will  grow  worse. 

It  is  very  significant  that  out  of  230  representatives  of  the  interests 
of  employers,  chosen  largely  on  the  recommendations  of  their  own 
organizations,  less  than  half  a  dozen  have  denied  the  propriety  of 
collective  action  on  the  part  of  employees.  A  considerable  number 
of  these  witnesses  have,  however,  testified  that  they  denied  in  prac- 
tice what  they  admitted  to  be  right  in  theory.  A  majority  of  such 
witnesses  were  employers  who  in  the  operation  of  their  business 
maintained  what  they,  in  accordance  with  common  terminology, 
called  the  "  open  shop."  The  theory  of  the  "  open  shop,"  according 
to  these  witnesses,  is  that  workers  are  employed  without  any  refer- 
ence to  their  membership  or  nonmembership  in  trade  unions;  while, 
as  a  matter  of  fact,  it  was  found  upon  investigation  that  these  em- 
ployers did  not,  as  a  rule,  willingly  or  knowingly  employ  union 
men.  Nevertheless,  this  is  deemed  by  the  commission  to  be  a  minor 
point.  The  "  open  shop,"  even  if  union  men  are  not  discriminated 
against,  is  as  much  a  denial  of  the  right  of  collective  action  as  is  the 
"  anti union  shop."  In  neither  is  the  collective  action  of  employees 
permitted  for  the  purpose  of  negotiating  with  reference  to  labor  con- 
ditions. Both  in  theory  and  in  practice,  in  the  absence  of  legisla- 
tive regulation,  the  working  conditions  are  fixed  by  the  employer. 

It  is  evident,  therefore,  that  there  can  be  at  best  only  a  benevolent 
despotism  where  collective  action  on  the  part  of  the  employees  does 
not  exist. 

A  great  deal  of  testimony  has  been  introduced  to  show  that  em- 
ployers who  refuse  to  deal  collectively  with  their  workmen  do  in  fact 
grant  audiences  at  which  the  grievances  of  their  workmen  may  be 
presented.  One  is  repelled  rather  than  impressed  by  the  insistence 
with  which  this  idea  has  been  presented.  Every  tyrant  in  history 
has  on  stated  days  granted  audiences  to  which  his  faithful  subjects 
might  bring  their  complaints  against  his  officers  and  agents.  At 
these  audiences,  in  theory  at  least,  even  the  poorest  widow  might  be 
heard  by  her  sovereign  in  her  search  for  justice.  That  justice  was 
never  secured  under  such  conditions,  except  at  the  whim  of  the 
tyrant,  is  sure.  It  is  equally  sure  that  in  industry  justice  can  never 
be  attained  by  such  a  method. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  65 


The  last  point  which  needs  to  be  considered  in  this  connection  is 
the  attitude  frequently  assumed  by  employers  that  they  are  per- 
fectly willing  to  deal  with  their  own  employees  collectively,  but  will 
resist  to  the  end  dealing  with  any  national  organization,  and  resent 
the  intrusion  of  any  persons  acting  for  their  employees  who  are  not 
members  of  their  own  labor  force.  In  practice  these  statements  have 
been  generally  found  to  be  specious.  Such  employers  as  a  rule  op- 
pose any  effective  form  of  organization  among  their  own  employees 
as  bitterly  as  they  fight  the  national  unions.  The  underlying  motive 
of  such  statements  seems  to  be  that  as  long  as  organizations  are  un- 
supported from  outside  they  are  ineffective  and  capable  of  being 
crushed  with  ease  and  impunity  by  discharging  the  ringleaders. 
Similarly,  the  opposition  to  the  representation  of  their  employees 
by  persons  outside  their  labor  force  seems  to  arise  wholly  from  the 
knowledge  that  as  long  as  the  workers'  representatives  are  on  the 
pay  roll  they  can  be  controlled,  or,  if  they  prove  intractable  they 
can  be  effectually  disposed  of  by  summary  dismissal. 

To  suggest  that  labor  unions  can  be  effective  if  organized  on  less 
than  a  national  scale  seems  to  ignore  entirely  the  facts  and  trend 
of  present-day  American  business.  There  is  no  line  of  organized  in- 
dustry in  which  individual  establishments  can  act  independently. 
Ignoring  for  the  time  the  centralization  of  control  and  ownership, 
and  also  the  almost  universal  existence  of  employers'  associations, 
the  mere  fact  of  competition  would  render  totally  ineffective  any  or- 
ganization of  employees  which  was  limited  to  a  single  establishment. 
Advance  in  labor  conditions  must  proceed  with  a  fair  degree  of  uni- 
formity throughout  any  line  of  industry.  This  does  not  indeed  re- 
quire that  all  employees  in  an  industry  must  belong  to  a  national 
organization,  for  experience  has  shown  that  wherever  even  a  con- 
siderable part  are  union  members,  the  advances  which  they  secure 
are  almost  invariably  granted  by  competitors,  even  if  they  do  not 
employ  union  men,  in  order  to  prevent  their  own  employees  from 
organizing. 

The  conclusions  upon  this  question,  however,  are  not  based  upon 
theory,  but  upon  a  thorough  investigation  of  typical  situations  in 
which  the  contrast  between  organization  and  the  denial  of  the  right 
of  organization  could  best  be  studied.  The  commission  has  held 
public  hearings  and  has  made  thorough  investigations  in  such  in- 
dustrial communities  as  Paterson,  N.  J.,  Los  Angeles,  Cal.,  Lead, 
S.  Dak.,  and  Colorado,  where  the  right  of  collective  action  on  the 
part  of  employees  is  denied.  These  investigations  have  shown  that 
under  the  best  possible  conditions,  and  granting  the  most  excellent 
motives  on  the  part  of  employers,  freedom  does  not  exist  either 
politically,  industrially,  or  socially,  and  that  the  fiber  of  manhood 
will  inevitably  be  destroyed  by  the  continuance  of  the  existing  situ- 
ation. Investigations  have  proved  that  although  the  physical  and 
material  conditions  may  be  unusually  good,  as,  for  example,  in 
Lead,  S.  Dak.,  they  are  the  price  paid  for  the  absolute  submission 

I  of  the  employees  to  the  will  of  the  employing  corporation.  Such 
conditions  are,  moreover,  shown  by  the  hearings  of  the  commission 
and  by  the  investigations  of  its  staff  to  be  unusual.  Los  Angeles, 
for  example,  although  exceptionally  endowed  in  location,  climate, 
and  natural  resources,  was  sharply  criticized  for  the  labor  conditions 
38819°— 16 5* 


66          HEPOET  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

which  had  developed  during  its  "  open  shop  "  regime  even  by  Mr. 
Walter  Drew,  representing  several  of  the  largest  associations  which 
contend  for  the  "open  shop."  It  is  significant  that  the  only  claim 
ordinarily  made  for  the  conditions  in  such  establishments  or  locali- 
ties is  that  "  they  are  as  good  as  are  secured  by  the  union."  As  a 
matter  of  fact,  there  are  few  establishments  which  make  this  boast, 
and  in  the  majority  the  conditions  were  found  to  be  far  below  any 
acceptable  standards. 

The  commission  has  also,  through  public  hearings  and  the  inves- 
tigations of  its  staff,  made  a  thorough  and  searching  investigation  of 
the  conditions  in  those  industries  and  establishments  where  collective 
action,  through  the  medium  of  trade  unions  and  joint  agreements, 
exists.  It  has  not  been  found  that  the  conditions  in  such  industries 
are  ideal,  nor  that  friction  between  employers  and  the  unions  is  un- 
known ;  nor  has  it  been  found  that  the  employees  in  such  industries 
have  entirely  achieved  economic,  political,  and  industrial  freedom,  for 
these  ideals  can  not  be  gained  until  the  fundamental  changes  in  our 
political  and  economic  structure,  which  have  already  been  referred  to, 
have  in  some  way  been  accomplished.  It  has  been  found,  however, 
that  the  material  conditions  of  the  workers  in  such  industries  and 
establishments  are  on  a  generally  higher  plane  than  where  workers 
are  unorganized;  that  important  improvements  in  such  conditions 
have  been  achieved  as  the  direct  result  of  organization ;  that  the  friction 
which  exists  in  such  industries  and  establishments  has  been  reduced 
rather  than  increased  by  organization ;  and  that  the  workers  at  least 
have  secured  a  basis  upon  which  their  political  and  economic  freedom 
may  ultimately  be  established. 

The  evils  of  graft,  "  machine  politics,"  factional  fights,  and  false 
leadership,  which  have  been  found  sometimes  to  exist  in  such  organ- 
ized industries,  are  those  which  are  inevitable  in  any  democratic  form, 
of  organization.  They  are  the  same  evils  which  have  accompanied 
the  development  of  the  American  Nation,  and  of  its  States  and 
municipalities.  Such  evils  as  we  have  found  to  exist  are  indeed 
to  be  condemned,  but  a  study  of  the  history  of  these  organizations 
seems  to  show  clearly  that  there  is  a  tendency  to  eradicate  them  as 
the  organizations  become  stronger  and  as  the  membership  becomes 
more  familiar  with  the  responsibilities  and  methods  of  democratic 
action.  Furthermore,  there  is  a  fundamental  principle  which  applies 
in  this  field  as  in  all  other  lines  of  human  activity.  This  principle 
is  contained  in  the  following  contrast:  In  democratic  organizations 
such  evils  and  excesses  as  may  arise  tend  to  disrupt  and  destroy  the 
organization  and  are  therefore  self -eradicating;  while  in  an  au- 
tocracy, evils  and  excesses  tend  inevitably  to  strengthen  the  existing 
autocrat  and  can  be  eradicated  only  in  the  event  of  a  revolt  on  the 
part  of  those  who  suffer  from  such  evils.  This  is  the  history  not 
only  of  every  form  of  artificial  association,  but  of  nations. 

The  fundamental  question  for  the  Nation  to  decide,  for  in  the  end 
public  opinion  will  control  here  as  elsewhere,  is  whether  the  workers 
shall  have  an  effective  means  of  adjusting  their  grievances,  improv- 
ing their  condition,  and  securing  their  liberty,  through  negotiation 
with  their  employers,  or  whether  they  shall  be  driven  by  necessity 
and  oppression  to  the  extreme  of  revolt.  Where  men  are  well  or- 
ganized, and  the  power  of  employers  and  employees  is  fairly  well 
balanced,  agreements  are  nearly  always  reached  by  negotiation;  but, 


REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  67 

even  if  this  fails,  the  strikes  or  lockouts  which  follow  are  as  a  rule 
merely  cessations  of  work  until  economic  necessity  forces  the  parties 
together  again  to  adopt  some  form  of  compromise.  With  the  unor- 
ganized there  is  no  hope  of  achieving  anything  except  by  spon- 
taneous revolt.  Too  often  has  it  been  found  that  during  the  delay 
of  attempted  negotiations  the  leaders  are  discharged  and  new  men 
are  found  ready  to  take  the  place  of  those  who  protest  against  condi- 
tions. Without  strike  funds  or  other  financial  support  the  unor- 
ganized must  achieve  results  at  once ;  they  can  not  afford  to  wait  for 
reason  and  compromise  to  come  into  play.  Lacking  strong  leaders 
and  definite  organization,  such  revolts  can  only  be  expected  to  change 
to  mob  action  on  the  slightest  provocation. 

Looking  back  over  the  industrial  history  of  the  last  quarter  cen- 
tury, the  industrial  disputes  which  have  attracted  the  attention  of 
the  country  and  which  have  been  accompanied  by  bloodshed  and 
violence  have  been  revolutions  against  industrial  oppression,  and 
not  mere  strikes  for  the  improvement  of  working  conditions.^  Such 
revolutions  in  fact  wrere  the  railway  strikes  of  the  late  eighties,  the 
Homestead  strike,  the  bituminous  coal  strike  of  1897,  the  anthracite 
strikes  of  1900  and  1903,  the  strike  at  McKees  Rocks  in  1909,  the 
Bethlehem  strike  of  1910,  the  strikes  in  the  textile  mills  at  Lawrence, 
Paterson,  and  Little  Falls,  many  of  the  strikes  in  the  mining  camps 
of  Idaho  and  Colorado,  the  garment  workers'  strikes  in  New  York 
and  other  cities,  and  the  recent  strikes  in  the  mining  districts  of  West 
Virginia,  Westmoreland  County,  Pa.,  and  Calumet,  Mich. 

As  a  result,  therefore,  not  only  of  fundamental  considerations  but 
of  practical  investigations,  the  results  of  which  are  described  in  detail 
hereinafter,  it  would  appear  that  every  means  should  be  used  to 
extend  and  strengthen  organizations  throughout  the  entire  industrial 
field.  Much  attention  has  been  devoted  to  the  means  by  which  this 
can  best  be  accomplished,  and  a  large  number  of  suggestions  have 
been  received.  As  a  result  of  careful  consideration,  it  is  suggested 
that  the  commission  recommend  the  following  action : 

1.  Incorporation  among  the  rights  guaranteed  by  the  Constitution 
of  the  unlimited  right  of  individuals  to  form  associations,  not  for  the 
sake  of  profit  but  for  the  advancement  of  their  individual  and  col- 
lective interests. 

2.  Enactment  of  statutes  specifically  protecting  this  right  and  pro- 
hibiting the  discharge  of  any  person  because  of  his  membership  in  a 
labor  organization. 

3.  Enactment  of  a  statute  providing  that  action  on  the  part  of  an 
association  of  individuals  not  organized  for  profit  shall  not  be  held  to 
be  unlawful  where  such  action  would  not  be  unlawful  in  the  case  of 
an  individual. 

4.  That  the  Federal  Trade  Commission  be  specifically  empowered 
and  directed  by  Congress,  in  determining  unfair  methods  of  compe- 
tition to  take  into  account  and  specially  investigate  the  unfair  treat- 
ment of  labor  in  all  respects,  with  particular  reference  to  the  follow- 
ing points : 

(a)  Refusal  to  permit  employees  to  become  members  of  labor  or- 
ganizations. 

(?>}  Refusal  to  meet  or  confer  with  the  authorized  representatives 
of  employees. 


68  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

5.  That  the  Department  of  Labor,  through  the  Secretary  of  Labor 
or  any  other  authorized  official,  be  empowered  and  directed  to  present 
to  the  Federal  Trade  Commission,  and  to  prosecute  before  that  body 
all  cases  of  unfair  competition  arising  out  of  the  treatment  of  labor 
"which  may  come  to  its  attention. 

6.  That  such  cases,  affecting  as  they  do  the  lives  of  citizens  in  the 
humblest  circumstances,  as  well  as  the  profits  of  competitors  and  the 
peace  of  the  community,  be  directed  by  Congress  to  have  precedence 
over  all  other  cases  before  the  Federal  Trade  Commission. 

CONCLUSIONS  AND  RECOMMENDATIONS. 

The  remainder  of  the  report  is  devoted  largely  to  the  conclusions 
and  recommendations  with  respect  to  specific  questions  propounded 
by  Congress.  The  facts  upon  which  these  conclusions  and  recom- 
mendations are  based  are  contained  in  the  testimony  taken  by  the 
commission  and  in  the  reports  of  its  investigators.  The  complete 
corrected  testimony  is  transmitted  to  Congress,  as  well  as  a  carefully 
prepared  digest  or  the  evidence.  The  reports  of  the  investigators 
have  likewise  been  placed  in  the  possession  of  Congress.1 

I.  INDUSTRIAL  CONDITIONS  or  ADULT  WORKMEN  IN  GENERAL 

INDUSTRIES. 

In  this  section  only  the  conditions  of  adult  workmen  are  consid- 
ered, leaving  the  questions  affecting  women  and  children  for  separate 
consideration  later.  The  problems  involved  are  essentially  different, 
and  the  position  of  women  and  children  in  relation  to  the  State  may 
be  clearly  distinguished  from  the  position  of  adult  workmen. 

WAGES. 

As  a  result  of  the  investigations  which  have  been  made  the  follow- 
ing conclusions  are  justified : 

1.  The  welfare  of  the  State  demands  that  the  useful  labor  of  every 
able-bodied  workman  should,  as  a  minimum,  be  compensated  by  suf- 
ficient income  to  support  in  comfort  himself,  a  wife,  and  at  least  three 
minor  children,  and  in  addition  to  provide  for  sickness,  old  age,  and 
disability.  Under  no  other  conditions  can  a  strong,  contented,  and 
efficient  citizenship  be  developed. 

'2.  Under  existing  conditions  such  an  income  is  not  received  by 
fully  one-half  of  the  wage  earners  employed  in  industry. 

3.  The  natural  resources  of  the  United  States  are  such  that  an 
industrial  population  properly  educated  and  efficiently  organized  can 
produce  enough  to  achieve  this  standard  of  living. 

4.  It  is  probable  that  even  at  present  the  national  agricultural  and 
industrial  output  is  sufficient  to  permit  the  establishment  of  such  a 
standard. 

5.  The  problem  is  therefore  essentially  one  of  distribution. 

6.  The  fixing  of  the  wages  of  adult  workmen  by  legal  enactment  is 
not  practicable  nor  desirable  as  a  general  policy,  except  for  public 
employees. 

7.  A  just  standard  of  wages  in  any  industry  or  occupation  can  best 
be  reached  by  collective  bargaining  between  employers  and  employees 

1  These  reports  have  not  been  printed  with  this  document,  on  the  recommendation  of 
Chairman  Frank  P.  Walsh,  as  stated  in  his  letter  in  Senate  Report  No.  143,  Sixty-fourth 
Congress. 


EEPOET  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  69 

for  the  purpose  of  forming  voluntary  joint  agreements.  The  success 
and  justice  of  such  joint  agreements  is,  however,  dependent  upon  the 
essential  equality  of  the  two  parties  and  can  not  be  attained  unless 
effective  organization  exists. 

It  is  suggested  that  the  commission  make  the  following  recom- 
mendations : 

1.  In  order  that  the  public  may  be  kept  fully  informed  with  regard 
to  labor  conditions,  and  that  a  proper  basis  of  facts  should  exist  for 
negotiation  and  arbitration,  the  Federal  Government  should  enact 
the  necessary  legislation  to  provide  for  the  collection,  through  the 
Bureau  of  Labor  Statistics  or  otherwise,  of  the  full  and  exact  facts 
regarding  wages,  hours  of  labor,  and  extent  of  unemployment  for 
every  industry.     Every  employer  should  be  required  by  law  to  file 
with  the  proper  authority  a  sworn  statement  of  these  facts  according 
to  a  prescribed  form.     These  statistics  should  be  published  annually, 
and  the  full  data  regarding  any  industry  or  plant  should  be  accessible 
to  any  mediator  or  any  other  responsible  citizen. 

2.  Uniform  statutes  should  be  passed  by  the  legislatures  of  all 
States  requiring  that  wages  be  paid  at  least  semimonthly  and  in  cash, 
except  where  by  joint  agreement  other  methods  are  agreed  upon. 

HOURS  OF  LABOR. 

As  a  result  of  investigation  the  following  conclusions  are  justified: 

1.  The  physical  well-being,  mental  development,  and  recreational 
needs  of  every  class  of  population  demand  that  under  normal  circum- 
stances the  working  day  should  not  exceed  eight  hours. 

2.  A   very  large   percentage  of   the   workmen   in   manufactures, 
transportation,  and  mining  work  more  than  eight  hours  per  day. 

3.  This  is  in  marked  contrast  to  the  condition  of  those  whose 
economic  position  enables  them  to  define  the  length  of  their  own 
working  day. 

4.  Practical  experience  has  shown  that  the  reduction  of  working 
hours  is  in  the  interest  not  only  of  the  worker  and  the  community 
generally,  but  of  the  employer. 

5.  The  regulation  by  legal  enactment  of  working  hours  of  adult 
workmen  is  not  generally  practicable  nor  desirable,  except  for  public 
employees. 

It  is  suggested  that  the  commission  recommend : 

1.  That  in  the  so-called  continuous  occupations,  other  than  the 
movement  of  trains,  requiring  work  during  both  the  day  and  the 
night  for  six  or  seven  days  per  week,  the  State  and  Federal  Govern- 
ments should  directly  intervene,  so  that  the  working  hours  should  not 
exceed  eight  per  day  nor  extend  to  more  than  six  days  per  week. 

SAFETY  AND   SANITATION. 

The  investigations  which  have  been  made  warrant  the  following 
conclusions : 

1.  Great  progress  has  been  made  during  recent  years  in  promoting 
safety  and  sanitation  in  manufacturing,  mining,  and  transportation. 

2.  The  progress  has  been  most  rapid  in  the  direction  of  safeguard- 
ing workers  from  industrial  accidents. 


70  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

3.  Progress  in  safety  has  been  in  part  the  result  of  continued 
agitation  and  education,  but  has  proceeded  most  rapidly  and  satis- 
factorily since  the  enactment  of  workmen's  compensation  laws,  which 
render  unsafe  working  conditions  expensive  to  the  employer. 

4.  The  movement  has  also  been  largely  promoted  by  the  forma- 
tion of  safety  committees  composed  of  officials  and  workmen,  and 
by  the  creation  of  joint  conferences  of  employers  and  employees  to 
assist  and  advise  State  officials  in  the  administration  of  the  law  and 
in  the  formulation  of  safety  rules. 

5.  The  campaign  for  safety   needs,  however,   to  be  greatly  ex- 
tended as  rapidly  as  possible.     The  annual  list  of  accidents,  approxi- 
mately 35,000  fatalities  and  700,000  injuries  involving  disability  of 
over  four  weeks,  can  not  be  regarded  complacently.     From  one-third 
to  one-half  of  these  accidents  have  been  estimated  by  competent  au- 
thorities to  be  preventable  by  proper  safeguards,  inspection,  and 
control. 

6.  The  advance  in  the  sanitation  of  workshops  has  been  less  rapid, 
because  not  only  are  the  dangers  less  obvious,  but  there  is  no  financial 
liability  for  diseases  or  deaths  occurring  as  the  result  of  improper 
sanitation.     Future  progress  in  sanitation  demands  attention   not 
only  to  cleanliness  and  ventilation  but  to  occupational  diseases. 

7.  The  most  direct  incentive  for  the  promotion  of  sanitation  would 
be  the  adoption  of  a  proper  system  of  sickness  insurance. 

It  is  suggested  that  the  commission  recommend : 

1.  The  creation  of  a  bureau  of  industrial  safety  (except  that  the 
section  providing  a  museum  of  safety  is  not  indorsed).    Proper  steps 
should  be  taken  to  provide  for  the  coordination  of  the  work  of  all 
Federal  bureaus  whose  work  is  concerned  with  industrial  safety. 

2.  The  appropriations  of  the  Public  Health  Service  for  the  investi- 
gation and  promotion  of  industrial  sanitation  should  be  increased. 

HOUSING. 

It  has  been  found  in  the  course  of  the  commission's  investigations : 

1.  The  present  provisions  for  the  housing  of  workmen  are  gen- 
erally bad,  not  only  in  the  large  cities  but  in  industrial  communities 
of  every  size  and  in  rural  districts. 

2.  Xot  only  are  the  houses  and  tenements  which  are  available  for 
workers  largely  insanitary  and  unfit  for  habitation  but  they  are  in- 
adequate, resulting  in  high  renjs,  overcrowding,  and  congestion. 

3.  Such  conditions  make  not  only  for  discomfort  and  unhappiness, 
but  for  disease  and  degeneration. 

4.  The  ordinary  method  of  supplying  houses  through  their  erec- 
tion by  private  capitalists  for  investment  and  speculation  has  rarely, 
if  ever,  been  adequate. 

5.  Excellent  plans  for  the  housing  of  workmen  have  been  put  into 
effect  by  a  number  of  firms  and  corporations,  but  such  measures  have 
not  at  all  affected  the  general  situation,  and  being  dependent  upon 
the  volition  of  individuals  can  not  be  regarded  as  likely  to  greatly 
influence  progress. 

6.  The  tenement-house  acts,  as  well  as  the  health  ordinances  and 
building  regulations  of  municipalities,  while  generally  productive 
of  good  effects,  are  at  best  surface  remedies  and  can  never  cure  the 
evils  of  the  present  housing  situation. 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  71 

7.  In  every   important   European   country   Government   aid   and 
direct  intervention  to  curb  speculation  have  proved  to  be  necessary 
for  the  promotion  of  any  real  progress. 

8.  Governmental  action  in  Europe  has  chiefly  taken  the  following 
forms : 

(a)  Extension  of  credit  to  voluntary  nonprofit-making  associa- 
tions. 

(&)  Construction  by  the  Government  of  buildings  which  are 
leased  for  long  periods  on  easy  terms. 

(c)  Exemption  from  taxation  and  other  subsidies  for  homes  con- 
structed for  occupancy  by  their  owners. 

(d)  Legislation  designed  to  prevent  the  holding  of  land  out  of 
use  and  to  secure  for  the  Government  a  part  of  the  "  unearned  in- 
crement." 

It  is  suggested  that  the  commission  recommend : 

1.  The  Federal  and  State  Governments  should  institute  investiga- 
tions directed  not  so  much  to  ascertaining  existing  housing  condi- 
tions as  to  formulating  constructive  methods  by  which  direct  sup- 
port and  encouragement  to  the  promotion  of  improved  housing  can 
be  given.     Actual  experiment  in  the  promotion  of  housing  should 
proceed  as  rapidly  as  proper  plans  can  be  drafted. 

2.  Special  attention  should  be  given  to  taxation,  in  order  that  land 
should  as  far  as  possible  be  forced  into  use  and  the  burden  of  taxa- 
tion be  removed  from  home  owners. 

3.  The  municipalities  should  be  relieved  from  all  State  restrictions 
which  now  prevent  them  from  undertaking  the  operation  of  adequate 
housing  schemes  and  from  engaging  in  other  necessary  municipal 
enterprises. 

II.  WOMEN  AND  CHILDREN  IN  INDUSTRY. 

The  investigations  and  hearings  of  the  commission  justify  the 
conclusions : 

1.  As  a  result  of  their  unprotected  condition,  women  and  children 
are  exploited  in  industry,  trade,  domestic  service,  and  agriculture 
to  an  extent  which  threatens  their  health  and  welfare  and  menaces 
the  well-being  of  future  generations. 

2.  The  competition  of  women  and  children  is  a  direct  menace  to 
the  wage  and  salary  standards  of  men. 

3.  Under  present  conditions,  children  are  permitted  by  their  par- 
ents to  go  to  work  largely  because  their  earnings  are  necessary  for 
the  support  of  the  rest  of  the  family.    The  restrictive  legislation  of 
the  past  quarter  century,  although  admirable  in  purpose  and  ultimate 
results,  has  thrown  a  heavy  burden  upon  the  fathers  and  mothers, 
who,  at  existing  wages,  have  been  barely  able  to  support  their  fami- 
lies.   The  evidence  shows  that  the  burden  of  child-labor  legislation 
has  rested  upon  the  wage  earners  rather  than  upon  employers.     It 
is  the  testimony  of  enlightened  employers  that  the  employment  of 
children  is  unprofitable,  and  that  the  effect  of  excluding  children 
from  factories  has  been  to  increase  rather  than   decrease  profits. 
In  the  interests  of  society  as  a  whole:  further  restrictions  on  the  em- 
ployment of  immature  children  are  necessary,  but  it  is  important  that 
they  should  be  made  with  an  understanding  that  the  burden  will  rest 
primarily  upon  the  wage  earners,  whose  self-sacrifice  should  be  fully 
recognized. 


72  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

4.  The  increasing  employment  of  women  has  been  due  to  two  pri- 
mary causes :  First,  the  low  wages  of  men,  which  have  made  the  earn- 
ings of  women  necessary  for  the  support  of  the  family,  and,  second, 
the  inducement  to  employers  to  substitute  women  for  men  because 
they  will  accept  lower  wages  and  are  less  likely  to  protest  against 
conditions.     The  substitution  of  women  for  men  has  been  greatly 
assisted  by  the  introduction  of  improved  machinery,  which  makes 
strength  and  technical  skill  unnecessary. 

5.  The  increased  employment  of  women  under  present  working 
conditions  is  a  serious  menace  to  their  own  health  and  well-being, 
to  the  wages  of  their  husbands  and  brothers,  and  to  the  ideals  of 
family  life  upon  which  American  civilization  has  been  established. 

6.  The  conditions  under  which  women  are  employed  in  domestic 
service  and  in  agriculture  merit  the  attention  of  the  Nation  no  less 
than  does  their  employment  in  manufacturing  and  trade.    Not  only 
is  the  economic  condition  of  women  employed  in  agriculture  and 
domestic  service  a  matter  of  grave  concern,  but  they  are  subject  to 
overwork,  unreasonable  hours,  and  personal  abuse  of  various  kinds, 
from  which  they  have  been  largely  relieved  in  factories  and  stores 
through  agitation  and  legislation. 

7.  The  position  of  women  in  industry  has  been  rendered  doubly 
hard  by  reason  of  their  lack  of  training  for  industrial  work,  by  the 
oversupply  of  such  labor  and  the  consequent  competition,  by  their 
traditional  position  of  dependence,  and  by  their  disfranchisement. 

8.  A  very  thorough  investigation  in  the 'New  England  States  failed 
to  show  a  single  manufacturer  who  had  left  a  State  as  a  result  of 
restrictive  factory  legislation.     On  the  contrary,  the  majority  of 
manufacturers  expressed  the  opinion  that  the  legislation  regulat- 
ing conditions  for  women  and  children  had  been  advantageous  to 
the  industry  as  a  whole,  particularly  because  it  placed  all  competi- 
tors upon  the   same   footing.     Similarly   an   investigation  of   the 
effects  of  minimum-wage  legislation  failed  to  show  any  calculable 
effects  upon  the  cost  of  production  or  upon  the  employment  of  women 
after  a  sufficient  period  had  elapsed  to  allow  the  necessary  readjust- 
ments to  be  made. 

9.  Nevertheless,  there  is  a  strong  and  increasing  demand  on  the 
part  of  manufacturers  in  the  more  progressive  States  that  regula- 
tion of  factory  conditions  should  be  undertaken  by  the  Federal  Gov- 
ernment, in  order  that  competitors  in  all  parts  of  the  country  should 
be  placed  upon  an  equal  footing  in  this  respect.    The  same  demand 
comes  also  from  the  representatives  of  labor  not  only  because  the 
argument  of  "  interstate  competition  "  is  creating  strong  opposition 
to  progressive  legislation,  but  because  of  the  great  economy  of  effort 
which  would  result  from  having  to  make  the  fight  for  better  legisla- 
tion only  at  the  National  Capital  instead  of  in  45  States. 

It  is  suggested  that  the  commission  recommend : 

1.  The  recognition  both  by  public  opinion  and  in  such  legislation 
as  may  be  enacted  of  the  principle  that  women  should  receive  the 
same  compensation  as  men  for  the  same  terms. 

2.  Until  this  principle  is  recognized  and  women  are  accorded  equal 
political  rights,  the  extension  of  State  protection  of  women,  through 
legislation   regulating   working   conditions,   hours  of   service,    and 
minimum  wages,  is  highly  desirable. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  73 

3.  The  increased  organization  of  working  women  for  self -protec- 
tion and  the  improvement  of  their  industrial  conditions. 

4.  The  inclusion  of  all  women  wrorking  for  wages,  whether  in  in- 
dustry, trade,  domestic  service,  or  agriculture,  under  future  legisla- 
tion regulating  their  wages,  hours,  or  working  conditions. 

5.  The  extension  of  the  principle  of  State  protection  of  children 
and  the  rapid  increase  of  facilities  for  their  education  as  outlined 
elsewhere. 

6.  The  enactment  by  Congress  of  legislation  embodying  the  prin- 
ciples contained  in  the  so-called  Palmer-Owen  bill,  which  was  before 
Congress  at  the  last  session. 

III.  INDUSTRIAL  CONDITIONS  AND  RELATIONS  ON  PUBLIC  UTILITIES. 

GENERAL. 

The  investigations  of  the  commission  show : 

1.  The  scope  of  the  Newlands  Act,  which  applies  only  to  employees 
engaged  in  the  operation  of  interstate  railroads,  is  top  narrow  and 
leaves  the  public  service  in  the  transmission  of  intelligence  and  in 
the  handling  of  interstate  commerce  likely  to  be  interrupted  by 
labor   disputes   without   any   adequate    legal   provision   either   for 
mediation  and  conciliation  or  for  making  the  facts  involved  in  the 
dispute  known  to  the  public. 

2.  Even  as  applied  to  train-service  employees,  the  Newlands  Act 
provides  no  means  of  bringing  the  facts  before  the  public,  except 
when  both  sides  agree  to  arbitration. 

3.  The  selection  of  impartial  members  of  arbitration  boards  has 
almost  without  exception  devolved  upon  the  Board  of  Mediation 
and  Conciliation,  owing  to  the  inability  of  the  parties  to  agree.     This 
not  only  imposes  an  unpleasant  and  burdensome  task  upon  the  Board 
of  Mediation  and  Conciliation,  but  tends  greatly  to  weaken  its  in- 
fluence.    The  experience  in  Great  Britain  shows  that  agreement  can 
be  reached  by  joint  conference  of  employers  and  employees  during 
a  period  of  industrial  peace  for  the  selection  of  a  panel  of  impartial 
persons  from  which  arbitrators  can  be  selected  when  they  are  needed, 
and  seems  to  indicate  that  in  the  United  States  the  inability  of  the 
parties  to  agree  upon  impartial  arbitrators  is  due  in  part  at  least  to 
the  fact  that  they  are  always  selected  during  the  heat  of  the  conflict. 

It  is  suggested  that  the  commission  recommend : 

1.  The  extension  of  the  Newlands  Act  to  cover  not  only  all  classes 
of  railroad  employees,  but  all  employees  of  public-service  corpora- 
tions which  are  engaged  in  interstate  commerce. 

2.  The   functions   of  the   Board   of  Mediation   and   Conciliation 
under  the  Newlands  Act  should  be  extended  to  provide  for  the 
creation  of  boards  of  investigation,  to  be  formed  only  by  consent  of 
both  parties  and  to  make  a  report  of  facts  and  recommendations 
which  will  not  be  binding  upon  either  side. 

3.  The  Board  of  Mediation  and  Conciliation  should  be  authorized 
by  Congress  to  create  an  advisory  council,  composed  of  equal  num- 
bers of  employers  and  employees,  for  the  purpose  of  creating  a  panel 
of  names  from  which  impartial  arbitrators  may  be  chosen  by  the 
Board  of  Mediation  and  Conciliation. 


74  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

TELEGRAPH. 

The  investigations  and  hearings  of  the  commission  justify  the 
following  conclusions : 

1.  The  workers  employed  by  the  two  principal  telegraph  com- 
panies (the  Western  Union  Telegraph  and  the  Postal  Telegraph- 
Cable)  are  not  only  underpaid,  as  admitted  by  the  highest  officials 
in  their  testimony  before  the  commission,  but  subject  to  many  abuses, 
such  as  the  denial  of  proper  periods  of  relief  while  on  duty;  the 
establishment  of  arbitrary  speed  rates,  which  frequently  result  in 
overstrain;  the  arbitrary  discharge  of  employees  without  notice  for 
any  cause  or  no  cause ;  the  employment  of  young  boys  for  messenger 
service  under  conditions  which  can  result  only  in  their  moral  cor- 
ruption; and  the  employment  of  women  for  telegraph  service  at 
night. 

2.  Such  conditions  have  existed  practically  without  change  at  least 
since  1884,  in  spite  of  the  facts  having  been  made  public  by  three 
Government  investigations. 

3.  The  workers  are  practically  unable  to  improve  their  condition 
because  these  two  companies,  which  control  practically  the  entire 
industry,  deny  them  the  right  of  organization.    The  suppression  of 
organization  is  effectively  carried  out  by  the  discharge  of  all  known 
to  be  union  men  or  union  sympathizers,  by  the  use  of  spies  who 
fraudulently  secure  the  confidence  of  employees  and  report  all  known 
to  be  union  members  or  sympathizers,  by  the  use  of  an  effective  sys- 
tem of  blacklisting,  and  by  the  control  even  of  the  personnel  of  the 
operators  upon  leased  wires  in  the  offices  of  brokers  and  other  private 
individuals. 

4.  The  two  companies  have  a  monopoly  of  the  transmission  of  tele- 
grams, and  no  effective  competition  exists  between  them.    These  com- 
panies are  performing  a  service  in  the  transmission  of  intelligence 
which  has  been  held  by  the  Federal  Supreme  Court  to  have  been 
reserved  by  the  Constitution  specifically  to  the  Federal  Government. 

5.  The  telegraph  companies  are  enormously  overcapitalized,  and 
their  rates,  which  are  graded  to  pay  dividends  upon  large  amounts 
of  stock  which  do  not  represent  the  investment  of  cash,  are  very  much 
higher  than  the  cost  of  service  warrants. 

6.  Owing  to  the  duplication  of  offices  on  the  part  of  the  two  com- 
panies and  the  maintenance  of  branch  offices  which  are  idle  for  a 
large  part  of  the  time,  this  service  is  being  performed  inefficiently 
and  at  an  unusually  high  cost  in  spite  of  the  low  wages  paid  the 
operators. 

It  is  suggested  that  the  commission  recommend : 

1.  The  property  of  the  telegraph  companies  or  such  part  of  their 
equipment  as  may  be  necessary  for  the  efficient  operation  of  a  na- 
tional telegraph  system  should  be  purchased  by  the  Federal  Govern- 
ment after  proper  valuation  and  placed  under  the  general  jurisdic- 
tion of  the  Post  Office  Department  for  operation.1  In  transferring 
the  service  to  the  Federal  Government  all  employees,  including  offi- 
cials and  other  persons,  necessary  for  successful  operation  should  be 
retained,  and  those  whom  the  elimination  of  the  duplicate  service 
of  'the  two  companies  renders  unnecessary  for  the  national  system 

1  The  economic  argument  for  the  postalization  of  telegraphs  and  telephones  is  pre- 
sented in  the  testimony  of  Hon.  David  J.  Lewis  before  the  commission. 


EEPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS,  75 

should  be  absorbed  into  other  branches  of  the  Federal  service  as  far 
as  practicable. 

2.  At  the  time  of  the  transfer  to  the  Federal  service  a  special  com- 
mission should  be  appointed  to  revise  the  salary  ratings  and  other 
working  conditions  and  place  them  upon  a  proper  basis. 

TELEPHONE. 

The  investigations  of  the  commission  are  the  basis  for  the  follow- 
ing statements: 

1.  The  condition  of  the  telephone  operators  in  both  interstate  and 
local  service  is  subject  to  grave  criticism.     The  wages  paid  even  in 
the  cities  having  the  highest  standards  are  insufficient  to  provide 
decently  for  women  who  have  no  other  means  of  support.    The  re- 
quirements and  nervous  strain  incident  to  the  service  are  so  very 
severe   that   experienced   physicians   have   testified   that   operators 
should  work  not  more  than  five  hours  per  day,  whereas  the  regular 
working  hours  are  from  seven  to  nine  per  day.    The  operators,  who 
are  principally  girls  and  young  women,  are  required  to  work  at  night, 
going  to  and  returning  from  their  work  at  hours  when  they  are 
subject  to  grave  menace.     The  policy  of  the  companies  in  general 
provides  for  sanitary  and  reasonably  comfortable  working  places 
and  for  attention  to  the  recreation  and  physical  needs  of  the  oper- 
ators, but  in  a  number  of  cities  the  conditions  even  in  these  respects 
are  subject  to  severe  criticism. 

2.  The  telephone  operators  are  unable  to  secure  reasonable  condi- 
tions for  themselves  because  of  their  youth  and  the  fact  that  they 
ordinarily  remain  in  the  service  only  a  short  time. 

3.  The  organization  of  employees  for  their  own  protection  is  effec- 
tively resisted  by  the  employing  companies. 

4.  The  American  Telephone  &  Telegraph  Co.,  with  its  subsidiary 
and  affiliated  corporations,  controls  more  than  70  per  cent  of  the 
total  telephone  business  of  the  country.    The  American  Telephone  & 
Telegraph  Co.  has  been  enormously  profitable  and  is  well  able  to 
afford   the  necessary   improvements   in  working   conditions.     The 
American  Telephone  &  Telegraph  Co.  has  increased  its  capitaliza- 
tion enormously  without  the  investment  of  new  capital. 

5.  The  transaction  by  which  the  American  Telephone  &  Telegraph 
Co.,  which  had  been  a  subsidiary  of  the  American  Bell  Telephone 
Co.,  absorbed  the  parent  company  in  1899  was  not  only  designed  to 
evade  the  legal  limitations  contained  in  the  Massachusetts  charter  of 
the  American  Bell  Telephone  Co.,  but  resulted  in  the  increase  of  the 
capitalization  of  the  combination  from  $25,886,300  to  $75,276,600 
without  the  addition  of  any  new  capital. 

6.  The  transmission  of  intelligence  is  a  function  which  is  spe- 
cifically reserved  by  the  Constitution  to  the  Federal  Government, 
but  which  in  the  telephone  field  has  been  permitted  to  become  the 
practical  monopoly  of  a  single  corporation. 

It  is  suggested  that  the  commission  recommend : 

1.  The  purchase  by  the  Federal  Government,  after  proper  valua- 
tion, of  the  property  of  the  interstate  and  local  telephone  companies, 
or  such  part  of  their  equipment  as  may  be  necessary  for  the  efficient 
operation  of  a  national  telephone  system. 


76  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

2.  The  transfer  of  all  employees,  including  officials,  necessary  for 
the  efficient  operation  of  the  national  telephone  system  to  the  Federal 
service,  as  far  as  possible,  and  the  absorption,  as  far  as  practicable, 
of  all  employees  who  are  not  necessary  for  the  telephone  system  into 
other  branches  of  the  Federal  service. 

3.  When  such  employees  are  transferred  to  the  Federal  service,  the 
creation  of  a  special  commission  to  establish  salary  ratings  and  other 
working  conditions  on  a  proper  basis. 

4.  In  the  meantime  provision  should  be  made  by  Congress  for  the 
creation  of  a  minimum  wage  board  to  fix  minimum  wage  standards 
for  women  employees  who  are  engaged  in  the  transmission  of  mes- 
sages in  interstate  commerce.     The  board  should  be  authorized  to 
differentiate  between  localities  in  fixing  minima,  if  on  due  considera- 
tion such  differential  rates  should  be  deemed  advisable. 

5.  The  creation  of  minimum  wTage  boards  in  the  several  States  to 
fix  minimum  wages  for  all  women  employees  engaged  in  service 
within  the  State. 

THE  PULLMAN  CO. 

The  investigations  and  hearings  of  the  commission  developed  the 
following  facts: 

1.  The  conductors  and  porters  employed  in  the  car  service  of  the 
Pullman  Co.  are  employed  under  conditions  which  seem  to  require 
radical  readjustment.     Both  classes  of  employees  are  admitted  by 
officials  of  the  company  to  be  underpaid. 

The  standard  salary  of  the  porters  ($27.50  per  month)  is  such  that 
the  porters  are  obliged  to  secure  tips  from  the  public  in  order  to  live. 
The  Pullman  Co.  is  admitted  by  the  chairman  of  the  board  of  direc- 
tors to  be  the  direct  beneficiary  of  the  tips  from  the  public  to  the 
extent  of  the  difference  between  a  fair  wage  and  that  which  is  now 
paid. 

The  hours  of  service  are  extremely  long,  the  regulations  of  the 
company  allowing  porters  and  conductors  when  in  service  only  four 
hours'  sleep  per  night  and  penalizing  them  severely  if  they  sleep 
W7hile  on  duty.  Employees  of  the  Pullman  Co.  are  subject  to  many 
other  abuses,  among  which  may  be  mentioned  the  arbitrary  deduc- 
tion from  their  salaries  for  such  time  as  they  may  not  be  needed 
for  the  actual  service  of  the  company,  although  they  are  required  to 
report  at  the  office  each  morning  and  are  sometimes  compelled  to 
wait  the  greater  part  of  the  day  without  compensation ;  the  require- 
ment that  porters  shall  furnish  "blacking,  although  they  are  not  per- 
mitted to  charge  passengers  for  the  service  of  shoe  cleaning;  the 
system  of  arbitrary  penalties  for  the  infraction  of  multitudinous 
rules;  the  requirement  that  all  employees  shall  purchase  their  uni- 
forms from  one  mercantile  establishment,  the  owners  of  which  are 
largely  interested  in  the  Pullman  Co.;  and  the  lack  of  proper  pro- 
vision of  sleeping  quarters  for  employees  when  away  from  their  home 
stations. 

2.  The  Pullman  Co.  has  a  bonus  system  by  which  employees  who 
have  a  "  clean  record  "  for  the  year  receive  an  extra  month's  salary. 
This  system  serves  to  increase  the  earnings  of  those  who  receive  the 
bonus,  and  is  unquestionably  appreciated  by  them.     Nevertheless  it 
is  inequitable  in  penalizing  with  extra  severity  any  infractions  of 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  77 

rules  which  occur  during  the  latter  half  of  the  year,  and  puts  into 
the  hands  of  officials  and  inspectors  a  means  of  discrimination  which 
can  be  arbitrarily  exercised. 

3.  The  effect  of  the  tipping  system  is  not  only  to  degrade  those 
who  are  obliged  by  their  economic  conditions  to  accept  tips  but  to 
promote  discrimination  in  the  service  of  the  public. 

4.  The  employees  of  the  Pullman  Co.  are  unable  to  improve  their 
condition  through  organization,  as  employees  known  to  be  members 
of  labor  unions  are  discharged,  and  through  the  means  of  an  effective 
system  of  espionage  employees^  are  deterred  from  affiliating  with 
labor  unions. 

5.  The  company  is  tremendously  overcapitalized,  having  increased 
its  capitalization  from  $36,000,000  in  1893  to  $120,000,000  in  1915, 
without  the  investment  of  a  single  dollar  on  the  part  of  the  stock- 
holders.   Upon  the  basis  of  actual  cash  paid  in,  the  annual  dividends 
of  the  company  are  not  less  than  29  per  cent.     During  the  history 
of  the  company  the  stockholders    have    received    cash    dividends 
amounting  to  at  least  $167,000,000  and  special  stock  dividends  of 
$64,000,000,  making  a  total  of  $231,000,000  on  an  actual  investment  of 
$32,601,238. 

6.  The  company  enjoys  a  practical  monopoly  of  the  sleeping-car 
service. 

It  is  suggested  that  the  commission  recommend : 

1.  The  enactment  by  Congress  of  a  statute  prohibiting  the  tipping 
of  any  employee  of  a  public-service  corporation  engaged  in  interstate 
commerce  and  providing  a  proper  fine  for  both  the  giver  and  the 
recipient  of  the  tip. 

2.  The  amendment  of  the  existing  law  regulating  the  hours  of 
service  of  train  employees  to  include  the  employees  engaged  in  the 
Pullman  service. 

3.  The  extension  of  the  Newlands  Act,  as  already  suggested,  to 
cover  the  Pullman  Co. 

RAILROADS. 

The  investigations  of  the  commission  with  regard  to  railroads 
have  been  too  limited  to  permit  of  general  findings  or  recommen- 
dations. Enough  evidence  has,  however,  come  before  the  commission 
with  regard  to  three  points  to  warrant  attention. 

1.  The  railroad  construction  camps  are  largely  insanitary,  over- 
crowded, and  improperly  equipped  for  the  health  and  comfort  of 
the  employees.     In  addition,  there  are  many  abuses,  such  as  over- 
charging at  the  commissary  and  grafting  by  foremen. 

2.  The  so-called  voluntary  benefit  associations  of  a  number  of  the 
railroads  constitute,  under  the  present  system  of  management,  a  great 
injustice  to  employees.     These  funds,  which  are  contributed  almost 
entirely  by  the  employees,  the  management  as  a  rule  paying  only  the 
cost  of  administration,  until  recently  were  generally  used  to  relieve 
the  companies  from  liability  for  accident,  employees  being  required 
to  sign  a  release  in  favor  of  the  company  at  the  time  that  they  became 
members  of  the  benefit  association.     In  some  cases,  even,  the  member- 
ship is  compulsory.     Nevertheless,  the  employees  have  no  voice  in 
the  management  and  receive  no  equity  when  they  are  discharged. 
Finally,  such  associations,  under  their  present  management,  serve  to 


78  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

exert  an  undue  influence  over  employees,  since  the  members,  if  they 
quit  the  service  for  any  period  or  for  any  cause,  sacrifice  to  the  com- 
pany all  that  has  been  paid  in. 

3.  Under  the  authority  granted  by  the  several  States  the  railroads 
maintain  a  force  of  police,  and  some,  at  least,  have  established  large 
arsenals  of  arms  and  ammunition.  This  armed  force,  when  aug- 
mented by  recruits  from  detective  agencies  and  employment  agencies, 
as  seems  to  be  the  general  practice  during  industrial  disputes,  consti- 
tutes a  private  army  clothed  with  a  degree  of  authority  which  should 
be  exercised  only  by  public  officials ;  these  armed  bodies,  usurping  the 
supreme  functions  of  the  State  and  oftentimes  encroaching  on  the 
rights  of  the  citizens,  are  a  distinct  menace  to  public  welfare. 

It  is  suggested  that  the  commission  recommend : 

1.  Thorough  investigation  by  the  Public  Health  Service  of  rail- 
road construction  camps  as  well  as  other  labor  camps,  and  the  prepa- 
ration of  definite  plans  for  such  camps  and  a  standard  code  of  sani- 
tary regulations. 

2.  The  enactment  by  Congress  of  a  statute  expressly  prohibiting 
corporations  engaged  in  interstate  commerce  from  inducing  or  com- 
pelling their  employees  to  sign  releases  of  liability  for  accidents. 

3.  Congress  should  enact  a  statute  prohibiting  interstate  employ- 
ers from  requiring  their  employees  to  contribute  to  benefit  funds, 
and  providing  for  the  participation  of  employees  engaged  in  inter- 
state commerce  in  the  management  of  all  benefit  funds  and  other 
funds  to  which  they  contribute. 

4.  The  regulation  by  Federal  statute  of  the  employment  of  police 
on  interstate  railroads.    The  statute  should  not  only  provide  for  the 
organization,  personnel,  and  powers  of  such  police,  but  should  defi- 
nitely provide  that  during  labor  disputes  such  police  should  be  sub- 
ject to  the  proper  civil  authorities  and  paid  out  of  the  public  treas- 
ury.    The  statute  should  also  provide  that  such  corporations  should 
be  permitted  to  have  firearms  only  under  license,  requiring  that  a 
definite  record  be  maintained  showing  the  character  of  each  firearm 
and  to  whom  it  is  issued. 

5.  The  assumption  by  the  States  of  full  responsibility  and  definite 
provision  not  only  for  protecting  the  property  of  railroads,  but  for 
preventing  trespass  upon  their  property. 

IY.  INDUSTRIAL,  CONDITIONS  IN  ISOLATED  COMMUNITIES. 

The  investigations  and  hearings  of  the  commission  are  the  basis 
for  the  following  statements : 

1.  The  conditions  existing  in  typical  industrial  communities  which 
are  either  wholly  or  in  large  part  owned  or  controlled  by  a  single 
corporation  or  individual  employer,  present  every  aspect  of  a  state 
of  feudalism  except  the  recognition  of  specific  duties  on  the  part  of 
the  emplo37er.     The  employees  in  such  communities  are  dependent  on 
a  single  corporation,  or  employer,  for  their  livelihood.     Furthermore, 
the  employer  in  many  cases  controls  the  social  and  political  life  or 
such  communities,  either  by  the  complete  absorption  of  local  political 
powers  or  by  domination  of  the  local  authorities. 

2.  The  fundamental  rights  of  citizens  in  such  communities  are,  as 
a  general  rule,  seriously  abridged,  if  not  actually  denied.     Among 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  79 

the  rights  most  seriously  violated  are  the  right  of  free  speech  and 
assemblage  and  the  right  of  public  highways. 

In  some  cases.  as,  for  example,  in  Colorado,  employers  in  such  com- 
munities have  assumed  to  usurp  the  functions  of  the  Federal  Gov- 
ernment itself  in  the  issuance  of  money  orders,  and  have  not  only 
denied  emploj^ees  access  to  the  post  office  when  located  in  their  com- 
pany stores  but  have  opened  and  otherwise  interfered  with  the  mail 
directed  to  the  employees. 

Such  feudalistic  conditions  tend  to  develop  principally  in  connec- 
tion with  the  private  exploitation  of  natural  resources,  being  most 
frequently  found  in  mining  camps,  lumber  camps  (including  turpen- 
tine camps),  and  large  plantations.  There  are,  however,  striking 
examples  even  in  the  case  of  manufactures,  as,  for  examples,  the  tex- 
tile towns  and  steel  towns. 

3.  The  most  extreme  form  of  domination  and  control  exists  in 
what  are  known  as  "  closed  camps,"  where  the  employer  owns  all  the 
land  upon  which  such  camps  are  located  and,  because  of  this  private 
ownership,  not  only  exercises  control  over  the  local  government  but 
dictates  arbitrarily  who  shall  be  permitted  to  come  into  or  pass 
through  such  communities.  It  has  frequently  been  argued  that  such 
communities  are  simply  the  inevitable  accompaniment  of  the  develop- 
ment of  new  country  and  will  be  eliminated  with  time.  This  is  not 
true,  however,  as  the  commission's  investigations  have  disclosed  a 
large  number  of  "  closed  camps "  which  have  been  in  existence  for 
more  than  a  generation. 

It  is  suggested  that  the  commission  recommend : 

1.  The  enactment  of  appropriate  State  legislation  providing  that 
where  communities  develop,  even  upon  privately  owned  land,  the 
powers  of  the  civil  government  shall  not  be  interfered  with,  nor 
shall  the  rights  of  access  to  the  residence  of  any  person  be  restricted, 
nor  shall  the  rights  of  persons  to  come  and  go  unmolested,  to  speak 
freely  and  to  assemble  peacefully,  be  interfered  with  or  considered 
to  stand  upon  a  different  basis  from  the  rights  of  persons  in  other 
communities. 

2.  In  the  case  of  public  lands  containing  timber  or  minerals,  which 
are  now  or  may  hereafter  come  into  the  possession  of  the  Federal 
Government,  it  should  be  provided  by  statute  that  neither  the  lands 
nor  the  mineral  rights  should  under  any  circumstances  be  sold,  but 
should  be  used  only  upon  lease  for  a  limited  term,  such  lease  to 
contain  as  a  part  of  the  contract  the  conditions  with  regard  to  the 
rights  of  inhabitants  as  recited  above  and  such  lease  to  be  f orfeitable 
without  recourse  in  case  of  the  infraction  of  said  conditions. 

3.  The  Post  Office  Department  should  be  directed  to  report  to 
Congress  all  communities  in  which  the  post  office  is  in  any  company's 
store  or  other  building  operated  by  an  employer  or  in  which  the  post- 
master is  a  private  employer  or  the  agent  of  an  employer.     The 
report  should  show  the  facts  separately  for  those  communities  in 
which  the  employer  or  corporation  operates  an  industry  upon  which 
any  large  number  of  inhabitants  are  dependent. 

4.  Congress  and  the  State  legislatures  should  enact  statutes  pro- 
viding that  any  attempt  on  the  part  of  an  employer  to  influence  his 
employees,  either  directly  or  indirectly,  in  connection  with  any  Fed- 
eral election,  either  for  or  against  any  particular  candidate,  shall 


80  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

constitute  intimidation;  and  further  specifying  that  it  shall  con- 
stitute intimidation  for  any  employer  to  give  notice  to  his  workmen 
that  in  the  event  of  the  election  of  any  particular  candidate  the 
establishment  will  not  be  operated. 

V.  THE  CONCENTRATION  OF  WEALTH  AND  INFLUENCE. 

The  evidence  developed  by  the  hearings  and  investigations  of  the 
commission  is  the  basis  for  the  following  statements : 

1.  The  control  of  manufacturing,  mining,  and  transportation  in- 
dustries is  to  an  increasing  degree  passing  into  the  hands  of  great 
corporations  through  stock  ownership,  and  control  of  credit  is  cen- 
tralized in  a  comparatively  small  number  of  enormously  powerful 
financial  institutions.     These  financial  institutions  are  in  turn  dom- 
inated by  a  very  small  number  of  powerful  financiers. 

2.  The  final  control  of  American  industry  rests,  therefore,  in  the 
hands  of  a  small  number  of  wealthy  and  powerful  financiers. 

3.  The  concentration  of  ownership  and  control  is  greatest  in  the 
basic  industries  upon  which  the  welfare  of  the  country  must  finally 
rest. 

4.  With  few  exceptions  each  of  the  great  basic  industries  is  dom- 
inated by  a  single  large  corporation,  and  where  this  is  not  true  the 
control  of  the  industry  through  stock  ownership  in  supposedly  inde- 
pendent corporations  and  through  credit  is  almost,  if  not  quite,  as 
potent. 

5.  In  such  corporations,  in  spite  of  the  large  number  of  stock- 
holders, the  control  through  actual  stock  ownership  rests  with  a  very 
small  number  of  persons.     For  example,  in  the  United  States  Steel 
Corporation,  which  had  in  1911  approximately  100,000  shareholders, 
1.5  per  cent  of  the  stockholders  held  57  per  cent  of  the  stock,  while 
the  final  control  rested  with  a  single  private  banking  house. 

Similarly,  in  the  American  Tobacco  Co.,  before  the  dissolution,  10 
stockholders  owned  60  per  cent  of  the  stock. 

6.  Almost  without  exception  the  employees  of  the  large  corpora- 
tions  are  unorganized,   as   a   result   of  the   active   and   aggressive 
"  nonunion  "  policy  of  the  corporation  managements. 

Furthermore,  the  labor  policy  of  the  large  corporations  almost  in- 
evitably determines  the  labor  policy  of  the  entire  industry. 

7.  A  careful  and  conservative  study  shows  that  the  corporations 
controlled  by  six  financial  groups  and   affiliated  interests  employ 
2,6ol,684  wage  earners  and  have  a  total  capitalization  of  $19,875,- 
200,000.    These  six  financial  groups  control  28  per  cent  of  the  total 
number  of  wage  earners  engaged  in  the  industries  covered  by  the 
report  of  our  investigation.    The  Morgan-First  National  Bank  group 
alone  controls  corporations  employing  785,499  wage  earners.     That 
this  control  is  effective  is  shown  by  the  following  telegram  from 
J.  P.  Morgan  to  E.  H.  Gary : 

Aix  LES  BAINS. 
E.  H.  GARY,  New  York: 

Have  received  yo;ir  cable  of  yesterday.  My  own  views  are  in  accordance 
with  those  of  the  financial  committee  in  New  York.  Certainly  until  question  of 
wages  has  been  settled  by  the  coal  and  railroads,  which  still  in  abeyance,  but 
settlement  seems  imminent.  Whole  question  wages  should  be  settled  simul- 
taneously by  all  interests  if  possible.  Going  Paris  Wednesday.  Will  see  there 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  81 


EL  C.  Fv  P.  A.  B.  W.,  *  and  will  cable  you  result  of  interview.  If  possible  and 
meets  your  approval,  think  better  wait  until  after  interview.  Perfectly  delight- 
ful here.  Weather  superb. 

J.  P.  M.2 

8.  The  lives  of  millions  of  wage  earners  are  therefore  subject  to  the 
dictation  of  a  relatively  small  number  of  men. 

9.  These  industrial  dictators  for  the  most  part  are  totally  ignorant 
of  every  aspect  of  the  industries  which  they  control  except  the  fin- 
ances, and  are  totally  unconcerned  with  regard  to  the  wrorking  and 
living  conditions  of  the  employees  in  those  industries.    Even  if  they 
were   deeply   concerned,   the   position    of   the  employees   would   be 
merely  that  of  the  subjects  of  benevolent  industrial  despots. 

10.  Except,  perhaps,  for  improvements  in  safety -and  sanitation, 
the  labor  conditions  of  these  corporation-controlled  industries  are  sub- 
ject to  grave  criticism  and  are  a  menace  to  the  welfare  of  the  Nation. 

11.  In  order  to  prevent  the  organization  of  employees  for  the 
improvement  of  working  conditions,  elaborate  systems  of  espionage 
are  maintained  by  the  large  corporations  which  refuse  to  deal  with 
^abor  unions,  and  employees  suspected  of  union  affiliation  are  dis- 
charged. 

12.  The  domination  by  the  men  in  whose  hands  the  final  control  of 
a  large  part  of  American  industry  rests  is  not  limited  to  their  em- 
ployees, but  is  being  rapidly  extended  to  control  the  education  and 
u  social  service  "  of  the  Nation. 

13.  This  control  is  being  extended  largely  through  the  creation  of 
enormous  privately  managed  funds  for  indefinite  purposes,  herein- 
after designated  "  foundations,"  by  the  endowment  of  colleges  and 
universities,  by  the  creation  of  funds  for  the  pensioning  of  teachers, 
by  contributions  to  private  charities,  as  well  as  through  controlling 
or  influencing  the  public  press. 

14.  Two  groups  of  the  "  foundations,"  namely,  the  Rockefeller  and 
Carnegie  foundations,  together  have  funds  amounting  to  at  least 
$250,000,000,  yielding  an  annual   revenue   of   at  least  $13,500,000, 
which  is  at  least  twice  as  great  as  the  appropriations  of  the  Federal 
Government    for   similar    purposes,    namely,    education    and    social 
service. 

15.  The  funds  of  these  foundations  are  exempt  from  taxation,  yet 
during  the  lives  of  the  founders  are  subject  to  their  dictation  for  any 
purpose  other  than  commercial  profit.    In  the  case  of  the  Rockefeller 
group  of  foundations,  the  absolute  control  of  the  funds  and  of  the 
activities  of  the  institutions  now  and  in  perpetuity  rests  with  Mr. 
Rockefeller,  his  son,  and  whomsoever  they  may  appoint  as  their 
successors. 

16.  The  control  of  these  funds  has  been  widely  published  as  being 
in  the  hands  of  eminent  educators  and  public-spirited  citizens.     In 
the  case  of  the  Rockefeller  foundations,  however,  not  only  is  the  con- 
trol in  the  hands  of  Mr.  John  D.  Rockefeller,  jr.,  and  two  of  the 
members  of  the  personal  staff  of  Mr.  John  D.  Rockefeller,  sr..  who 
constitute  the  finance  committee,  but  the  majority  of  the  trustees  of 
the  funds  are  salaried  employees  of  Mr.  Rockefeller  or  the  founda- 

i  H.  C.  Frick  and  P.  A.  B.  Widener. 

-Read   at   meeting   of   finance   committee,   United   States    Steel    Corporation,    April   27, 
1909. 

38819°— 16 6* 


82  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

tions,  who  are  subject  to  personal  dictation  and  may  be  removed  at 
any  moment. 

17.  The  funds  of  these  foundations  are  largely  invested  in  se- 
curities of  corporations  dominant  in  American  industry,  whose  posi- 
tion has  been  analyzed  under  the  early  headings  of  this  section.    The 
policies  of  these  foundations  must  inevitably  be  colored,  if  not  con- 
trolled, to  conform  to  the  policies  of  such  corporations. 

18.  The  funds  of  the  foundations  represent  largely  the  results 
either  of  the  exploitation  of  American  workers  through  the  payment 
of  low  wages  or  of  the  exploitation  of  the  American  public  through 
the  exaction  of  high  prices.    The  funds,  therefore,  by  every  right  be- 
long to  the  American  people. 

19.  The  powers  of  these  foundations  are  practically  unlimited,  ex- 
cept that  they  may  not  directly  engage  in  business  for  profit.     In 
the  words  of  President  Schurman,  of  Cornell,  himself  a  trustee  of 
the  Carnegie  foundation. 

Under  the  terms  of  this  broad  charter  .there  is  scarcely  anything 
which  concerns  the  life  and  work  of  individuals  or  nations  in 
which  the  Eockefeller  foundation  would  not  be  authorized  to  par- 
ticipate. As  the  safety  of  the  State  is  the  supreme  condition  of 
national  civilization  the  foundation  might  in  time  of  war  use  its 
income  or  its  entire  principal  for  the  defense  of  the  Republic.  In 
time  of  peace  it  might  use  its  funds  to  effect  economic  and  political 
reforms  which  the  trustees  deem  essential  to  the  vitality  and  effi- 
ciency of  the  Republic.  The  foundation  might  become  the  champion 
of  free  trade  or  protection,  of  trusts,  or  of  the  competing  concerns 
out  of  which  they  grow,  of  socialism  or  individualism,  of  the  pro- 
gram of  the  Republican  Party  or  the  program  of  the  Democratic 
Party.  It  might  endow  the  clergy  of  all  religious  denominations,  or 
it  might  subsidize  any  existing  or  any  new  religous  denomination. 
To-morrow  it  might  be  the  champion  of  the  Christian  religion,  and 
a  hundred  years  hence  furnish  an  endowment  for  the  introduction  of 
Buddhism  into  the  United  States.  It  might  build  tenement  houses 
for  the  poor  in  New  York  City,  or  carry  the  results  of  science  to 
enrich  the  exhausted  soils  of  the  East  or  the  arid  tracts  of  the  West 
It  might  set  up  an  art  gallery  in  every  State  of  the  United  States 
or  endow  universities  which  would  rival  the  great  State  universities 
of  the  West.  With  the  consent  of  the  legislature  it  might  relieve 
any  State  of  the  care  of  its  insane,  pauper,  and  dependent  classes  or 
construct  roads  for  the  benefit  of  farmers  and  motorists.  These  may 
not  be  likely  objects  for  the  application  of  the  funds  of  the  Rocke- 
feller foundation.  I  am  hot,  however,  attempting  to  forecast  its 
work  but  to  understand  its  charter. 

And,  so  far  as  I  can  see,  the  proposed  charter  would  authorize  all 
these  and  a  multitude  of  similar  activities.  If  the  object  of  the 
Rockefeller  Foundation  is  to  be  coextensive  with  human  civilization, 
then  it  may  do  anything  and  everything  which  its  trustees  think 
likely  to  effect  reform  or  improvement  in  the  material,  economic, 
intellectual,  artistic,  religious,  moral,  and  political  conditions  of  the 
American  people  or  of  mankind. 

20.  The  charters  of  these  foundations,  with  their  almost  unlimited 
powers,  were  granted  under  conditions  of  such  laxity  that  it  has  been 
testified  by  an  eminent  legal  authority  who  made  an  extensive  investi- 
gation that  those  granted  by  New  York  State  are  legally  defective 


BEPOBT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  83 

and  unconstitutional.  Furthermore,  evidence  developed  by  the  hear- 
ings of  the  commission  showed  that  in  increasing  the  number  of  its 
trustees  without  complying  with  the  requirements  of  the  law  govern- 
ing corporations  the  Rockefeller  Foundation  has  already  been  guilty 
of  a  breach  of  the  law. 

21.  These  foundations  are  subject  to  no  public  control,  and  their 
powers  can  be  curbed  only  by  the  difficult  process  of  amending  or 
revoking  their  charters.     Past  experience,  as,  for  example,  in  the 
case  of  the  insurance  companies,  indicates  that  the  public  can  be 
aroused  only  when  the  abuses  have  become  so  great  as  to  constitute  a 
scandal. 

22.  The  entrance  of  the  foundations  into  the  field  of  industrial 
relations,  through  the  creation  of  a  special  division  by  the  Rocke- 
feller Foundation,  constitutes  a  menace  to  the  national  welfare  to 
which  the  attention  not  only  of  Congress  but  of  the  entire  country 
should  be  directed.     Backed  by  the  $100,000,000  of  the  Rockefeller 
Foundation,  this  movement  has  the  power  to  influence  the  entire 
country  in  the  determination  of  its  most  vital  policy. 

23.  The  documentary  evidence  in  the  possession  of  the  commission 
indicates : 

(a)  That  the  so-called  "  investigation  of  industrial  relations  "  has 
not,  as  is  claimed,  either  a  scientific  or  a  social  basis,  but  originated 
to  promote  the  industrial  interests  of  Mr.  Rockefeller.     The  original 
letter  inviting  Mr.  W.  L.  Mackenzie  King  to  associate  himself  with 
the  Rockefellers  stated  that  Mr.  Rockefeller  and  Mr.  Greene  in  "  their 
purely   corporate   capacity   as  owners   and   directors  of   large  in- 
dustries "  desired  his  aid. 

(b)  That  the  investigation  forms  part  of  what  Mr.  Rockefeller, 
in  a  letter  to  Mr.  Ivy  L.  Lee  (the  press  agent  of  the  Colorado  opera- 
tors) ,  called  the  "  union  educational  campaign,"  which  is  referred  to 
by  Mr.  Bowers  as  "  the  fight  for  the  open  shop,"  the  results  of  which 
are  clearly  manifested  in  the  conditions  existing  in  the  camps  of  the 
Colorado  Fuel  &  Iron  Co.,  conducted  on  the  "  open-shop  "  principle. 

(<?)  That  Mr.  Rockefeller  planned  to  utilize  in  this  campaign 
literature  containing  statements  which  were  known  to  him  at  the  time 
to  be  untrue  and  misleading  (as,  for  example,  the  numerous  misstate- 
ments  in  the  "  Sermon  to  young  men  "  of  Dr.  Newall  Dwight  Hillis, 
including  the  statement  that  the  Colorado  operators  offered  to  recog- 
nize the  miners'  union),  and  also  literature  containing  statements 
which  constituted  a  malicious  libel  upon  a  large  body  of  American 
citizens — for  example,  the  following  statement  of  f*rof.  John  J. 
Stevenson : 

Labor  unions  defy  the  law,  but  are  ever  ready  to  demand  its  protection; 
their  principles  are  no  better  than  those  of  the  India  thugs,  who  practiced 
robbery  and  murder  in  the  name  of  the  goddess  Cali. 

(d)  That  the  investigation  of  industrial  relations  is  not  being  made 
in  good  faith,  inasmuch  as  its  director  states  that  he  will  not  now  nor 
hereafter  make  public  his  findings  regarding  a  most  important  part 
of  his  investigation,  namely,  the  investigation  in  Colorado. 

24.  The  purpose  of  Mr.  Rockefeller  to  influence  the  public  press 
is  clearly  shown  by  the  employment  of  an  experienced  publicity 
expert  as  a  member  of  his  personal  staff,  and  is  indicated  by  his 
evident  interest  in  the  ownership  or  control  of  a  number  of  publica- 
tions, of  which  we  have  records  dating  from  the  inquiry  of  his 


84  BEPOBT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

secretary  regarding  the  Pueblo  Star  Journal  in  May,  1913,  to  the 
extensive  conferences  regarding  a  loan  of  $125,000  to  finance  the 
Nation's  Business,  the  organ  of  the  National  Chamber  of  Commerce, 
which  was  established  and  given  a  semiofficial  status  through  the 
instrumentalities  of  the  Secretary  of  Commerce  and  Labor,  with  the 
sanction  of  a  former  President  of  the  United  States. 

25.  The  extent  of  the  possible  influence  of  these  foundations  and 
private  endowments  of  institutions  for  education  and  public  service 
is  shown  by  a  large  amount  of  evidence  in  the  possession  of  the  com- 
mission.    The  following  examples  may  be  cited : 

(a)  The  adoption  of  a  definite  line  of  policy  by  the  Bureau  of 
Municipal  -Research  of  New  York  to  meet  the  conditions  imposed  by 
Mr.  Rockefeller  in  connection  with  proposed  contributions. 

(5)  The  abandonment  by  several  colleges  and  universities  of  sec- 
tarian affiliations  and  charter  clauses  relating  to  religion  in  order  to 
secure  endowments  from  the  Carnegie  Corporation  and  pensions  for 
professors  from  the  Carnegie  Foundation  for  the  Advancement  of 
Teaching.  It  would  seem  conclusive  that  if  an  institution  will  will- 
ingly abandon  its  religious  affiliations  through  the  influence  of  these 
foundations,  it  will  even  more  easily  conform  to  their  will  any  other 
part  of  its  organization  or  teaching. 

26.  Apart  from  these  foundations  there  is  developing  a  degree  of 
control  over  the  teachings  of  professors  in  our  colleges  and  univer- 
sities which  constitutes  a  most  serious  menace.    In  June  of  this  year 
two  professors,  know  throughout  their  professions  as  men  of  great 
talent  and  high  character,  were  dropped  from  the  positions  they 
had  occupied  and  no  valid  reason  for  such  action  was  made  public. 
Both  were  witnesses  before  the  commission,  and  made  statements 
based  upon  their  own  expert  knowledge  and  experience  which  were 
given  wide  publicity.    One  was  a  professor  of  law  in  a  State  univer- 
sity, who  had  acted  as  counsel  for  the  strikers  in  Colorado;  the  other 
a  professor  of  economics,  who  had  not  only  been  active  in  fights  in 
behalf  of  child-labor  legislation  and  other  progressive  measures,  but 
had  recently  published  a  work  comparing  the  income  paid  for  prop- 
erty ownership  with  the  income  paid  for  all  classes  of  service. 

In  the  case  of  the  State  university  we  know  that  the  coal  operators 
in  conjunction  with  other  business  interests  had  gained  the  ascend- 
ancy and  exercised  a  great  degree  of  control  over  the  former  governor 
of  the  State,  that  the  coal  operators  were  bitterly  opposed  to  the 
professor  in  question,  and  that  the  dismissal  of  the  professor  had  been 
publicly  urged  by  the  operators  upon  numerous  occasions,  and  we 
nave  the  uncontroverted  statement  of  the  professor  that  he  had  been 
warned  that  if  he  testified  before  the  commission  he  would  not  be 
reappointed.  In  the  case  of  the  professor  in  the  other  university 
(which,  though  privately  endowed,  receives  large  appropriations 
from  the  State)  we  know  that  its  trustees  are  interested  in  corpora- 
tions which  have  bitterly  opposed  progressive  legislation,  and  are 
men  whose  incomes  are  derived  from  property  ownership  and  not 
from  service. 

In  the  face  of  such  an  enormous  problem  one  can  only  frankly 
confess  inability  to  suggest  measures  which  will  protect  the  Nation 
from  the  grave  dangers  described.  It  is  believed,  however,  that  if 
Congress  will  enact  the  measures  already  recommended,  providing 
for  a  heavy  tax  on  large  inheritances  with  a  rigid  limitation  on  the 


KEPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS.  85 

total  amount  of  the  bequest,  for  the  reclamation  by  the  Federal 
Government  of  all  parts  of  the  public  domain  (including  mineral 
rights)  which  have  been  secured  by  fraud,  and  for  a  tax  on  non- 
productive land  and  natural  resources,  a  great  step  in  the  right 
direction  will  have  been  taken. 

As  regards  the  "  foundations  "  created  for  unlimited  general  pur- 
poses and  endowed  with  enormous  resources,  their  ultimate  possi- 
bilities are  so  grave  a  menace,  not  only  as  regards  their  own  activities 
and  influence  but  also  the  benumbing  effect1  which  they  have  on 
private  citizens  and  public  bodies,  that  if  they  could  be  clearly  dif- 
ferentiated from  other  forms  of  voluntary  altrustic  effort  it  would 
be  desirable  to  recommend  their  abolition.  It  is  not  possible,  how- 
ever, at  this  time  to  devise  any  clear-cut  definition  upon  which  they 
can  be  differentiated. 

As  the  basis  for  effective  action,  it  is  suggested  that  the  commission 
recommend : 

1.  The  enactment  by  Congress  of  a  statute  providing  that   all 
incorporated  nonprofit-making  bodies  whose  present  charters  em- 
power them  to  perform  more  than  a  single  specific  function  and 
whose  funds  exceed  $1,000,000  shall  be  required  to  secure  a  Federal 
charter. 

The  Federal  charter  should  contain  the  following  provisions : 

(a)  Definite  limitation  of  the  funds  to  be  held  by  any  organiza- 
tion, at  least  not  to  exceed  the  largest  amount  held  by  any  at  the 
time  of  the  passage  of  the  act. 

(b)  Definite  and  exact  specifications  of  the  powers  and  functions 
which  the  organization  is  empowered  to  exercise,  with  provision  for 
heavy  penalties  if  its  corporate  powers  are  exceeded. 

(c)  Specific  provision  against  the  accumulation  of  funds  by  the 
compounding  of  unexpended  income  and  against  the  expenditure  in 
any  one  year  of  more  than  10  per  cent  of  the  principal. 

(d)  Rigid  inspection  of  the  finances  as  regards  both  investment 
and  expenditure  of  funds. 

(e)  Complete  publicity  through  open  reports  to  the  proper  Gov- 
ernment officials, 

(/)  Provision  that  no  line  of  work  which  is  not  specifically  and 
directly  mentioned  in  the  articles  of  incorporation  shall  be  entered 
upon  without  the  unanimous  consent  and  approval  of  the  board  of 
trustees,  nor  unless  Congress  is  directly  informed  of  such  intention 
through  communication  to  the  Clerk  of  the  House  and  the  Clerk  of 
the  Senate,  which  shall  be  duly  published  in  the  Congressional 
Record,  nor  until  six  months  after  such  intention  has  been  declared, 

2.  Provision  by  Congress  for  the  thorough  investigation,  by  a 
special  committee  or  commission,  of  all  endowed  institutions,  both 
secular  and  religious,  whose  property  holdings  or  income  exceeds  a 
moderate  amount.     The  committee  or  commission  should  be  given 
full  power  to  compel  the  production  of  books  and  papers  and  the 
attendance  and  testimony  of  witnesses.    It  should  be  authorized  and 
directed  to  investigate  not  only  the  finances  of  such  institutions  but 
all  their  activities  and  affiliations. 

1  A  striking  illustration  of  the  benumbing  effect  of  such  foundations  was  revealed  by 
the  almost  complete  cessation  of  private  activity  for  the  relief  of  the  Belgians  as  soon 
as  the  Rockefeller  Foundation  issued  to  the  press  a  statement  of  its  intention  to  under- 
take such  relief. 


86  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

3.  As  the  only  effective  means  of  counteracting  the  influence  of  the 
foundations,  as  long  as  they  are  permitted  to  exist,  consists  in  the 
activities  of  governmental  agencies  along  similar  lines,  the  appro- 
priations of  the  Federal  Government  for  education  and  social  service 
should  be  correspondingly  increased. 

VI.  THE  LAND  QUESTION  AND  THE  CONDITION  OF  AGRICULTURAL  LABOR. 

It  was  obviously  impossible  for  the  commission  to  attempt  a  de- 
tailed investigation  of  agricultural  condition,  but  because  of  the 
very  immediate  bearing  of  the  land  question  on  industrial  unrest,  it 
was  felt  necessary  to  make  as  thorough  investigation  as  possible  of 
the  phases  which  seemed  to  have  the  most  direct  bearing  on  our  gen- 
eral problem.  The  phases  selected  for  discussion  were,  first,  the  con- 
centration of  land  ownership  as  shown  by  existing  statistics ;  second, 
the  problem  of  seasonal  and  casual  agricultural  labor;  third,  the  in- 
crease and  change  in  the  character  of  farm  tenancy ;  and,  fourth,  the 
introduction  of  industrial  methods  into  agriculture  through  the  de- 
velopment of  corporations  operating  large  tracts  of  land.  The  find- 
ings and  recommendations  with  reference  to  the  concentration  of 
ownership  and  the  problems  of  seasonal  labor  are  set  forth  elsewhere. 
At  this  point  it  is  desired  to  present  the  results  of  the  investigations 
of  tenancy  and  agricultural  corporations. 

The  investigation  of  these  problems  was  confined  practically  to  the 
Southwest,  because  it  is  in  this  region  that  the  systems  have  become 
most  fully  developed  and  their  results  in  the  form  of  the  acute  unrest 
of  a  militant  tenant  movement  are  most  easily  studied.  The  investi- 
gations in  this  region,  however,  were  very  thorough,  consisting  of  de- 
tailed studies  and  reports  by  field  investigators,  which  were  later 
confirmed  by  a  public  hearing. 

As  a  result  of  these  investigations  the  following  conclusions  are 
fully  justified: 

1.  Tenancy  in  the  Southwestern  States  is  already  the  prevailing 
method  of  cultivation  and  is  increasing  at  a  very  rapid  rate.    In  1880 
Texas  had  65,468  tenant  families,  comprising  37.6  per  cent  of  all 
farms  in  the  State.    In  1910  tenant  farmers  had  increased  to  219.571 
and  operated  53  per  cent  of  all  farms  in  the  State.     Reckoning  on 
the  same  ratio  of  increase  that  was  maintained  between  1900  and 
1910,  there  should  be  in  Texas  in  the  present  year  (1915)  at  least 
236,000  tenant  farmers.    A  more  intensive  study  of  the  field,  however, 
shows  that  in  the  82  counties  of  the  State  where  tenancy  is  highest 
the  average  percentage  of  tenants  will  approximate  60. 

For  Oklahoma  we  have  not  adequate  census  figures  so  far  back, 
but  at  the  present  time  the  percentage  of  farm  tenancy  in  the  State 
is  54.8,  and  for  the  47  counties  where  the  tenancy  is  highest  the  per- 
centage of  tenancy  is  68.13. 

2.  Tenancy,  while  inferior  in  every  way  to  farm  ownership  from 
a  social  standpoint,  is  not  necessarily  an  evil  if  conducted  under  a 
system  which  protects  the  tenants  and  assures  cultivation  of  the  soil 
under  proper  and  economical  methods,  but  where  tenancy  exists 
under  such  conditions  as  are  prevalent  in  the  Southwest,  its  increase 
can  be  regarded  only  as  a  menace  to  the  Nation. 

3.  The  prevailing  system  of  tenancy  in  the  Southwest  is  share 
tenancy,  under  which  the  tenant  furnishes  his  own  seed,  tools,  and 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  87 

teams  and  pays  the  landlord  one-third  of  the  grain  and  one-fourth 
of  the  cotton.  There  is,  however,  a  constant  tendency  to  increase  the 
landlord's  share  through  the  payment  either  of  cash  bonuses  or  of  a 
higher  percentage  of  the  product.  Under  this  system  tenants  as  a 
class  earn  only  a  bare  living  through  the  work  of  themselves  and  their 
entire  families.  Few  of  the  tenants  ever  succeed  in  laying  by  a  sur- 
plus. On  the  contrary,  their  experiences  are  so  discouraging  that 
they  seldom  remain  on  the  same  farm  for  more  than  a  year,  and 
they  move  from  one  farm  to  the  next,  in  the  constant  hope  of  being 
able  to  better  their  condition.  Without  the  labor  of  the  entire  family 
the  tenant  farmer  is  helpless.  As  a  result,  not  only  is  his  wife  prema- 
turely broken  down,  but  the  children  remain  uneducated  and  without 
the  hope  of  any  condition  better  than  that  of  their  parents.  The 
tenants  having  no  interest  in  the  results  beyond  the  crops  of  a  single 
year,  the  soil  is  being  rapidly  exhausted  and  the  conditions,  there- 
fore, tend  to  become  steadily  worse.  Even  at  present  a  very  large 
proportion  of  the  tenants'  families  are  insufficiently  clothed,  badly 
housed,  and  underfed.  Practically  all  of  the  white  tenants  are  native 
born.  As  a  result  of  these  conditions,  however,  they  are  deteriorating 
rapidly,  each  generation  being  less  efficient  and  more  hopeless  than 
the  one  proceeding. 

4.  A  very  large  proportion  of  the  tenants  are  hopelessly  in  debt 
and  are  charged  exorbitant  rates  of  interest.     Over  95  per  cent  of 
the  tenants  borrow  from  some  source,  and  about  75  per  cent  borrow 
regularly  year  after  year.     The  average  interest  rate  on  all  farm 
loans  is  10  per  cent,  while  small  tenants  in  Texas  pay  15  per  cent  or 
more.     In  Oklahoma  the  conditions  are  even  worse,  in  spite  of  the 
enactment  of  laws  against  usury.     Furthermore,  over  80  per  cent  of 
the  tenants  are  regularly  in  debt  to  the  stores  from  which  they  secure 
their  supplies,  and  pay  exorbitantly  for  this  credit.     The  average 
rate  of  interest  on  store  credit  is  conservatively  put  at  20  per  cent 
and  in  many  cases  ranges  as  high  as  60  per  cent. 

5.  The  leases  are  largely  in  the  form  of  oral  contracts  which  run 
for  only  one  year  and  which  make  no  provision  for  compensation 
to  the  tenant  for  any  improvements  which  may  be  made  upon  the 
property.     As  a  result,  tenants  are  restrained  from  making  improve- 
ments, and  in  many  cases  do  not  properly  provide  for  the  upkeep  of 
the  property. 

6.  Furthermore,  the  tenants  are  in  some  instances  the  victims  of 
oppression  on  the  part  of  landlords.    This  oppression  takes  the  form 
of  dictation  of  character  and  amount  of  crops,  eviction  without  due 
notice,  and  discrimination  because  of  personal  and  political  convic- 
tions.   The  existing  law  provides  no  recourse  against  such  abuses. 

7.  As  a  result  both  of  the  evils  inherent  in  the  tenant  system  and 
of  the  occasional  oppression  by  landlords,  a  state  of  acute  unrest  is 
developing  among  the  tenants  and  there  are,  clear  indications  of  the 
beginning  of  organized  resistance  which  may  result  in  civil  dis- 
turbances of  a  serious  character. 

8.  The  situation  is  being  accentuated  by  the  increasing  tendency 
of  the  landlords  to  move  to  the  towns  and  cities,  relieving  themselves 
not  only  from  all  productive  labor,  but  from  direct  responsibility  for 
the  conditions  which  develop.     Furthermore,  as  a  result  of  the  in- 
creasing expenses  incident  to  urban  life  there  is  a  marked  tendency 


88  REPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS. 

to  demand  from  the  tenant  a  greater  share  of  the  products  of  his 
labor. 

9.  The  responsibility  for  the  existing  conditions  rests  not  upon  the 
landlords,  but  upon  the  system  itself.     The  principal  causes  are  to 
be  found  in  the  system  of  short  leases,  the  system  of  private  credit 
at  exorbitant  rates,  the  lack  of  a  proper  system  of  marketing,  the  ab- 
sence of  educational  facilities,  and  last  but  not  least  the  prevalence 
of  land  speculation. 

10.  A  new  factor  is  being  introduced  into  the  agricultural  situa- 
tion through  the  development  of  huge  estates  owned  by  corporations 
and  operated  by  salaried  managers  upon  a  purely  industrial  system. 
The  labor  conditions  on  such  estates  are  subject  to  grave  criticism. 
The  wages  are  extremely  low,  80  cents  per  day  being  the  prevailing 
rate  on  one  large  estate  which  was  thoroughly  investigated ;  arbitrary 
deductions  from  wages  are  made  for  various  purposes;  and  a  con- 
siderable part  of  the  wages  themselves  are  paid  in  the  form  of 
coupons,  which  are  in  all  essential  particulars  the  same  as  the  "  scrip  " 
which  has  been  the  source  of  such  great  abuse.     Furthermore,  the 
communities  existing  on  these  large  estates  are  subject  to  the  com- 
plete control  of  the  land-owning  corporation,  which  may  regulate 
the  lives  of  citizens  to  almost  any  extent.     There  is  an  apparent  tend- 
ency toward  the  increase  of  these  large  estates,  and  the  greatest 
abuses  may  be  expected  if  they  are  allowed  to  develop  unchecked. 

11.  Prompt  and  effective  action  on  the  part  of  the  States  and 
Nation  is  necessary  if  any  alleviation  of  the  conditions  which  have 
been  described  is  to  be  achieved. 

It  is  suggested  that  the  commission  recommend : 

1.  The    development   through   legislation    of   longer   time    farm 
leases  that  will  make  for  fair  rents,  security  of  tenure,  and  protection 
of  the  interests  of  the  tenant  in  the  matter  of  such  improvements  as 
he  may  make  on  a  leasehold  in  his  possession.     Such  legislation 
should  look  forward  to  leasing  systems  that  will  increase  tillage, 
improve  the  yielding  powers  of  the  soil  and  maintain  a  greater  popu- 
lation. 

In  order  to  secure  this  desired  end  it  is  suggested  that  the  commis- 
sion further  recommend  the  creation  of : 

2.  National  and  State  land  commissions  with  powers — 

(a)  To  act  as  land  courts  with  powers  to  hear  evidence  given  by 
landlord  and  tenants  as  to  questions  that  have  to  do  with  fair  rents, 
fixity  of  tenure  and  improvements  made  by  tenants  on  landlords' 
property ;  to  gather  evidence,  independently  of  both  parties,  that  will 
the  better  enable  such  land  courts  to  arrive  at  the  true  facts  in  each 
case ;  and  to  render  judgment  that  will  be  mandatory  for  such  time 
as  the  contractual  relationship  may  be  determined  to  hold. 

(b)  To  operate  farm  bureaus  for  the  following  purposes: 

First.  To  act  as  an  agent  between  landlords  and  tenants  in  the 
distribution  of  tenant  labor. 

Second.  To  act  as  an  agent  between  landlords  and  tenants  in  the 
preparation  of  equitable  contracts. 

Third.  To  act  as  an  information  agency  to  assist  home-seeking 
farmers. 

Fourth.  To  assist  in  the  distribution  of  seasonal  labor. 


EEPOBT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  89 


3.  The  development  of  better  credit  facilities  through  the  assist- 
ance of  the  Government  and  cooperative  organization  of  farmers 
and  tenants.     No  single  measure  can  be  recommended;  the  results 
must  be  achieved  through  the  development  of  a  sound  rural-credit 
system,  the  development  of  land  banks,  mortgage  associations  and 
credit  unions.     Foreign  experience  shows  that  through  these  means 
the  rate  of  interest  can  be  greatly  reduced  and  the  security  of  both 
the  borrower  and  the  lender  can  be  increased. 

4.  The  general  introduction  of  modernized  rural  schools  and  com- 
pulsory education  of  children.    The  functions  of  the  school  system 
shoulol  extend  beyond  education  to  the  social  service  of  the  entire 
rural  community,  assisting  in  the  organization  of  farmers  and  ten- 
ants for  cooperative  purposes,  and  promoting  other  measures  looking 
to  the  community's  welfare. 

5.  The  revision  of  the  taxation  system  so  as  to  exempt  from  taxa- 
tion all  improvements  and  tax  unused  land  at  its  full  rental  value. 

VII.    JUDICIAL  SETTLEMENT  OF  LABOR  CLAIMS  AND  COMPLAINTS. 

The  investigations  of  the  commission  are  the  basis  for  the  follow- 
ing statements: 

1.  Among  workers  of  every  class  there  are  constantly  arising  va- 
rious questions  for  judicial  settlement  wyhich  under  present  condi- 
tions can  not  be  speedily  or  satisfactorily  adjusted. 

2.  These  claims  are  of  a  very  diverse  character  and  include  not 
only  cases  of  actual  injustice  through  the  retention  of  wages,  but 
questions  of  interpretation   of   contract  and   the  establishment   of 
justice  in  cases  in  which  contracts  are  lacking. 

3.  The  ordinary  courts  are  unfitted  to  decide  such  questions,  not 
only  because  of  the  method  of  procedure  but  because  of  the  unf  amili- 
arity  of  ordinary  magistrates  and  judges  with  the  conditions  in- 
volved in  such  claims. 

It  is  suggested  that  the  commission  recommend : 

1.  The  establishment  either  by  the  States  or  by  municipalities  of 
industrial  courts  similar  to  those  which  have  proved  to  be  successful 
in  European  countries.    The  organization  and  method  of  procedure 
of  such  courts  are  described  in  detail  in  Bulletin  No.  98  of  the 
United  States  Bureau  of  Labor  and  need  not  be  discussed  here. 

2.  The  Commissioners  of  Labor  or  the  industrial  commissions  of 
the  several  States  should  be  authorized  and  directed,  where  such 
powers  do  not  now  exist,  to  receive  the  legal  complaints  of  all  classes 
of  workmen,  and,  where  they  are  found  to  have  a  proper  basis,  to 
prosecute  such  claims  vigorously,  with  a  view  to  securing  either  a 
voluntary  settlement  or  the  award  of  adequate  recompense  by  the 
proper  tribunal.    The  commissioners  of  labor  or  the  industrial  com- 
missions should  be  given  adequate  legal  assistance  to  enable  them  to 
prosecute  such  claims  promptly  and  vigorously.    Proper  steps  should 
be  taken  to  provide  for  cooperation  with  the  Federal  Immigration 
Bureau,  if  the  recommendation  on  page  51  is  adopted. 

3.  The  States  and  municipalities  should  consider  the  desirability 
of  creating  an  office  similar  to  that  of  the  public  defender  in  Los 
Angeles  tot  act  in  civil  claims  of  small  size. 


90  REPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS. 

VIII.  THE  LAW  RELATING  TO  TRADE-UNIONS  AND  INDUSTRIAL 

DISPUTES. 

The  commission  has  conducted  through  its  agents  extensive  investi- 
gations and  has  held  hearings  at  which  the  persons  who  have  devoted 
great  study  to  the  question  of  trade-union  law  testified  at  length. 
The  investigations  were  directed  both  to  establishing  the  present 
status  of  the  law  governing  trade-unions  and  industrial  disputes  and 
to  ascertaining  the  practical  effects  of  certain  classes  of  laws  and 
court  decisions.  The  results  of  the  investigations  are  largely  em- 
bodied in  the  reports  of  Mr.  J.  Wallace  Bryan,  of  the  Maryland  bar, 
and  Mr.  Edwin  E.  Witte. 

Because  of  the  necessity  for  exactness  in  dealing  with  questions 
which  are  so  involved  and  which  have  to  so  large  an  extent  been 
clouded  by  contradictory  court  decisions,  it  is  impossible  to  present  a 
satisfactory  summary  of  the  conclusions  which  have  been  reached 
upon  this  subject.  It  may,  however,  be  said  that  in  substance  the 
situation  revealed  by  these  investigations  is  as  follows : 

1.  The  greatest  uncertainty  exists  regarding  the  legal  status  of 
almost  every  act  which  may  be  done  in  connection  with  an  industrial 
dispute.    In  fact,  it  may  be  said  that  it  depends  almost  entirely  upon 
the  personal  opinion  and  social  ideas  of  the  court  in  whose  jurisdic- 
tion the  acts  may  occur. 

2.  The  general  effect  of  the  decisions  of  American  courts,  however, 
has  been  to  restrict  the  activities  of  labor  organizations  and  deprive 
them  of  their  most  effective  weapons,  namely,  the  boycott  and  the 
power  of  picketing,  while,  on  the  other  hand,  the  weapons  of  em- 
ployers, namely,  the  power  of  arbitrary  discharge,  of  blacklisting,  and 
of  bringing  in  strike  breakers,  have  been  maintained,  and  legislative 
attempts  to  restrict  the  employers'  powers  have  generally  been  de- 
clared unconstitutional  by  the  courts.     Furthermore,  an  additional 
weapon  has  been  placed  in  the  hands  of  the  employers  by  many 
courts  in  the  form  of  sweeping  injunctions,  which  render  punishable 
acts  which  would  otherwise  be  legal,  and  also-  result  in  effect  in  de- 
priving the  workers  of  the  right  to  jury  trial. 

3.  Important  steps  have  been  taken  to  deal  with  this  situation  by 
the  enactment  of  the  Clayton  Act,  applying  to  the  Federal  jurisdic- 
tion, and  by  the  passage  of  laws  in  Massachusetts  and  New  York 
which  define  the  rights  of  parties  engaged  in  industrial  disputes. 
The  actual  effect  of  the  Clayton  Act  can  not  be  ascertained  until  it 
has  been  tested  in  the  courts,  but  eminent  legal  authorities  have 
expressed  grave  doubts  that  it  will  accomplish  the  desired  results. 
At  any  rate,  it  does  not  seem  to  remove  the  root  of  the  existing 
injustice,  and,  furthermore,  in  all  the  States  except  New  York  and 
Massachusetts  the  grave  and  uncertain  situation  already  described 
exists.    This  situation  must  be  corrected. 

4.  There  are,  apparently,  only  two  lines  of  action  possible:  First, 
to  restrict  the  rights  and  powers  of  the  employers  to  correspond  in 
substance  to  the  powers  and  rights  now  allowed  to  trade.-unions,  and 
second,  to  remove  all  restrictions  which  now  prevent  the  freedom  of 
action  of  both  parties  to  industrial  disputes,  retaining  only  the  ordi- 
nary civil  and  criminal  restraints  for  the  preservation  of  life,  prop- 
erty, and  the  public  peace.     The  first  method  has  been  tried  re- 
peatedly and  has  failed  absolutely,  not  only  because  of  the  interven- 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  91 


1 


tion  of  the  courts  but  because  the  very  nature  of  the  acts  complained 
of  on  the  part  of  employers  (blacklisting  and  arbitrary  discharge) 
makes  it  impossible  to  prevent  them  effectively  by  any  form  of  legis- 
lation or  administration.  The  only  method,  therefore,  seems  to  be 
the  removal  of  all  restrictions  upon  both  parties,  thus  legalizing  the 
strike,  the  lockout,  the  boycott,  the  blacklist,  the  bringing  in  of 
strike  breakers,  and  peaceful  picketing.  This  has  been  most  suc- 
cessfully accomplished  by  the  British  trades  disputes  act,  which  is 
the  result  of  50  years  of  legal  evolution,  and  in  its  present  form 
seems  to  work  as  successfully  as  could  possibly  be  expected. 

It  is  suggested,  therefore,  that  the  commission  "recommend : 

1.  The  enactment  by  Congress  and  the  States  of  legislation  em- 
bodying the  principles  contained  in  the  British  trades  disputes  act, 
the  text  of  which  is  as  follows  r 

An  agreement  or  combination  of  two  or  more  persons  to  do  or  pro- 
cure to  be  done  any  act  in  contemplation  or  furtherance  of  a  trade 
dispute  between  employers  and  workmen  shall  not  be  indictable  as  a 
conspiracy  if  such  an  act  committed  by  one  person  wrould  not  be 
punishable  as  a  crime.  An  act  done  in  pursuance  of  an  agreement 
or  combination  by  two  or  more  persons  shall,  if  done  in  contempla- 
tion or  furtherance  of  a  trade  dispute,  not  be  actionable  unless  the 
act,  if  done  without  any  such  agreement  or  combination,  would  be 
actionable. 

An  action  against  a  trade-union,  whether  of  workmen  or  masters, 
or  against  any  members  or  officials  thereof  on  behalf  of  themselves 
and  all  other  members  of  the  trade-union  in  respect  of  any  tortious 
act  alleged  to  have  been  committed  by  or  on  behalf  of  the  trade- 
union,  shall  not  be  entertained  by  any  court. 

An  act  done  by  a  person  in  contemplation  or  furtherance  of  a 
trade  dispute  shall  not  be  actionable  on  the  ground  only  that  it 
induces  some  other  person  to  break  a  contract  of  employment  or 
that  it  is  an  interference  with  the  trade,  business,  or  employment  of 
some  other  person,  or  with  the  right  of  some  other  person  to  dispose 
of  his  capital  or  his  labor  as  he  wills. 

It  shall  be  lawful  for  one  or  more  persons,  acting  either  on  their 
own  behalf  or  on  behalf  of  a  trade-union,  or  of  an  individual  em- 
ployer or  firm  in  contemplation  or  furtherance  of  a  trade  dispute  to 
attend  at  or  near  a  house  or  place  where  a  person  resides  or  works 
or  carries  on  business  or  happens  to  be,  if  they  so  attend  merely  for 
the  purpose  of  peacefully  obtaining  or  communicating  information, 
or  of  peacefully  persuading  any  person  to  work  or  abstain  from 
working. 

Every  person  who,  with  a  view  to  compel  any  other  person  to 
abstain  from  doing  or  to  dp  any  act  which  such  other  person  has  a 
legal  right  to  do  or  abstain  from  doing,  wrongfully  and  without 
"egal  authority — 

1.  Uses  violence  to  or  intimidates  such  other  person  or  his  wife  or 
children,  or  injures  his  property;  or 

2.  Persistently   follows  such  other  person  about  from  place  to 
place;  or 

3.  Hides  any  tools,  clothes,  or  other  property  owned  or  used  by 
the  other  person,  or  deprives  him  of  or  hinders  him  in  the  use  there- 
of;  or 


92  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

4.  Watches  or  besets  the  house  or  other  place  where  such  other 
person  resides  or  works  or  carries  on  business  or  happens  to  be, 
or  the  approach  to  such  a  house  or  place :  or 

5.  Follows  such  other  person  with  twjo  or  more  other  persons  in  a 
disorderly  manner  in  or  through  any  street  or  road,  shall  on  con- 
viction thereof  by  a  court  of  summary  jurisdiction,  or  an  indictment 
as  hereinafter  mentioned,  be  liable  either  to  pay  a  penalty  not  ex- 
ceeding £20,  or  to  be  imprisoned  for  a  term  not  exceeding  three 
months,  with  or  without  hard  labor. 

IX.  THE  POLICING  OF  INDUSTRY. 

The  commission  has  made  extensive  investigations  and  has  heard 
many  witnesses  upon  this  subject,  and  as  a  result  the  following  con- 
clusions are  justified: 

1.  The  problem  of  policing  industry  is  generally  conceived  to  lie 
in  the  suppression  of  violence  and  the  protection  of  life  and  prop- 
erty; but  in  reality  consists  in  the  more  fundamental  problem  of 
protecting  the  rights  of  employers  and  employees  as  well  as  pre- 
serving the  peace. 

THE  ORIGIN  OF  INDUSTRIAL  VIOLENCE. 

2.  Violence  is  seldom,  if  ever,  spontaneous,  but  arises  from  a  con- 
viction that  fundamental  rights  are  denied  and  that  peaceful  methods 
of  adjustment  can  not  be  used.    The  sole  exception  seems  to  lie  in  the 
situation  where,  intoxicated  with  power,  the  stronger  party  to  the 
dispute  relies 'upon  force  to  suppress  the  wreaker. 

3.  The  arbitrary  suppression  of  violence  by  force  produces  only 
resentment,  which  will  rekindle  into  greater  violence  when  oppor- 
tunity offers.    Violence  can  be  prevented  only  by  removing  the  causes 
of  violence;  industrial  peace  can  rest  only  upon  industrial  justice. 

4.  The  origin  of  violence  in  connection  with  industrial  disputes 
can  usually  be  traced  to  the  conditions  prevailing  in  the  particular 
industry  in  times  of  peace  or  to  arbitrary  action  on  the  part  of 
governmental  officials  w^hich  infringes  on  what  are  conceived  to  be 
fundamental  rights.    Violence  and  disorder  during  actual  outbreaks 
usually  result  from  oppressive  conditions  that  have  obtained  in  a 
particular  shop  or  factory  or  in  a  particular  industry.    Throughout 
history  where  a  people  or  a  group  have  been  arbitrarily  denied  rights 
which  they  conceived  to  be  theirs,  reaction  has  been  inevitable.    Vio- 
lence is  a  natural  form  of  protest  against  injustice. 

5.  Violence  in  industrial  disputes  is  not  immediately  the  product 
of  industrial  conditions,  but  of  the  attitude  of  the  parties  to  the  dis- 
pute after  grievances  or  demands  have  been  presented.     The  prin- 
cipal sources  of  an  attitude  leading  to  violence  are : 

(a)  Arrogance  on  the  part  of  the  stronger  party.  This  may 
result  immediately  in  violence  through  the  use  of  force  for  the  sup- 
pression of  the  weaker  party.  The  force  used  may  be  physical  or 
industrial.  Physical  force  may  be  and  is  used  by  both  employers 
and  employees,  through  intimidation,  assaults,  or  attacks  on  prop- 
erty. Such  physical  aggression  is  seldom  used  by  employees,  as  they 
are  strategically  the  weaker  party  and  the  results  are  negative ;  only 


EEPOET  OF  COMMISSION  ON  INDUSTRIAL  EELATIONS.  93 

under  exceptional  circumstances  can  an  employer  be  coerced  by  the 
use  of  force  or  intimidation.  The  exceptions  seem  to  lie  in  the  use 
of  secret  means,  such  as  dynamite,  with  the  object  of  weakening  the 
employer's  resistance. 

The  use  of  force  by  workers  is  normally  directed  not  against  the 
person  or  property  of  the  employer,  but  against  strike  breakers  and 
guards.  Many  instances  of  the  use  of  physical  force  by  the  agents 
of  employers  have,  however,  come  before  the  commission,  indicating 
a  relatively  wide  use,  particularly  in  isolated  communities."  Such 
acts  of  violence  usually  take  the  form  of  assaults  upon  the  leaders 
of  the  workers  or  upon  organizers. 

The  instruments  of  industrial  force  belong  chiefly  to  the  employer, 
because  of  his  control  of  the  job  of  the  worker.  Their  use  is  more 
common  and  more  effective  than  any  other  form  of  violence  at  the 
command  of  the  employer.  The  most  powerful  weapon  is  the  power 
of  discharge,  which  may  be  used  indiscriminately  upon  mere  sus- 
picion, which  under  certain  conditions  may  be  almost  as  potent, 
either  in  use  or  threat,  as  the  power  of  life  and  death.  It  is  the 
avowed  policy  of  many  employers  to  discharge  any  man  who  gives 
any  sign  of  dissatisfaction  on  the  theory  that  he  may  become  a 
trouble  maker  or  agitator. 

The  only  corresponding  weapon  in  the  hands  of  the  workers  is 
sabotage,  in  the  form  either  of  malicious  destruction  of  property  or 
of  interference  with  production.  The  field  of  its  use  is  much  more 
restricted  in  practice  than  in  theory,  and  its  results  at  best  are  nega- 
tive and  produce  in  the  employer  only  a  blind  resentment  and  un- 
discriminating  hate.  Sabotage  as  a  policy  shows  no  signs  of  devel- 
oping in  American  industry. 

(&)  Equally  productive  of  an  attitude  leading  to  violence  is  the 
denial  of  the  use  of  peaceful  methods  of  adjusting  grievances,  or  the 
creation  of  a  situation  in  which  their  use  becomes  impossible. 

On  the  part  of  the  employer  the  arbitrary  acts  which  may  be 
classed  under  this  general  head  are :  Denial  of  the  right  to  organize ; 
refusal  to  consider  the  complaints  of  workers;  refusal  to  meet  the 
authorized  representatives  of  workers. 

Under  modern  industrial  conditions  any  one  of  these  acts  makes 
peaceful  negotiation  and  settlement  impossible.  Without  organiza- 
tion of  the  workers  their  collective  claims  can  not  be  considered; 
without  the  right  to  appoint  such  representatives  as  they  choose, 
workers  are  at  the  mercy  of  the  employer's  power  of  discharge,  and 
are  usually  unequal  to  the  task  of  presenting  and  arguing  their 
claims ;  while  the  refusal  to  consider  grievances  leaves  only  the  alter- 
native of  the  strike. 

On  the  part  of  the  workers,  the  possibility  of  peaceful  settlement 
may  be  destroyed  by  refusal  to  discuss  claims,  by  internal  dissensions 
which  render  collective  and  definite  action  looking  to  a  settlement  im- 
possible, and  by  the  issuance  of  ultimata  which  allow  no  time  for  con- 
sideration and  negotiaton.  In  any  one  of  these  situations  the  em- 
ployer has  only  the  choice  between  tame  submission  or  absolute  re- 
sistance to  the  demands  of  the  workers. 

(c)  The  immediate  cause  of  violence  in  connection  with  industrial 
disputes  is  almost  without  exception  the  attempt  to  introduce  strike 
breakers  to  take  the  place  of  the  workers  who  have  struck  or  who  are 


94  REPORT  OF  COMMISSION  OIST  INDUSTRIAL  RELATIONS. 

locked  out.  The  entire  problem  of  policing  industrial  disputes  grows 
out  of  the  problem  of  the  strike  breaker  and  the  attitude  of  the 
State  toward  him. 

All  experience  shows  that  if  no  attempt  is  made  to  operate  the 
plant,  violence  and  disturbances  requiring  the  police  are  practically 
unknown,  whereas  the  attempt  of  strike  breakers  to  reach  the  plant, 
particularly  where  strikers  are  enjoined  or  prevented  from  using 
reasonable  means  to  inform  them  of  the  existence  of  the  strike  and 
to  use  persuasive  methods  to  keep  them  from  entering  the  plant,  is 
invariably  accompanied  by  disorder  and  sometimes  by  active  violence. 

The  existing  attitude  of  the  courts  and  of  governmental  officials 
generally  is  that  the  entire  machinery  of  the  State  should  be  put  be- 
hind the  strike  breaker.  This  attitude  is  based  upon  the  theory  that 
two  important  rights  are  involved — first,  "the  right  of  the  strike 
breaker  to  work,"  and,  second,  "  the  right  of  the  employer  to  do 
business.''  During  earlier  years,  the  right  of  the  strike  breaker  was 
stressed  by  the  courts,  but  since  the  decision  of  Vice  Chancellor 
Stevenson  in  1902  (Jersey  City  Ptg.  Co.  v.  Cassidy,  53  Atl.,  230),  in 
which  the  doctrine  was  announced  as  "  recently  recognized,"  the 
right  of  the  employer  to  do  business  has  been  in  favor  apparently 
because  of  its  wider  application  and  the  fact  that  being  denominated 
a  property  right,  injunctions  could  regularly  be  issued  for  its  protec- 
tion. Regardless,  however,  of  their  origin,  both  of  these  so-called 
rights  seem  to  have  been  based  upon  misconceptions  by  the  courts. 
The  "  right  to  work  "  guaranteed  to  the  strike  breaker  seems  to  be 
based  upon  the  conception  that  the  strike  breaker  is  normally  a  work- 
ingman,  who  seeks  work  and  desires  to  take  the  place  of  the  striker. 
The  fact  is,  practically  without  exception,  either  that  the  strike 
breaker  is  not  a  genuine  workingman  but  is  a  professional  who  merely 
fills  the  place  of  the  worker  and  is  unable  or  unwilling  to  do  steady 
work,  or,  if  he  is  a  bona  fide  workingman,  that  he  is  ignorant  of  con- 
ditions or  compelled  to  work  under  duress.  The  nonworking  char- 
acter of  the  strike  breaker  is  shown  by  the  fact  that  very  few  are 
ever  retained  as  workers  after  the  termination  of  a  strike,  while  the 
attitude  of  genuine  workingmen  toward  strike  breaking  is  shown  by 
the  significant  fact  that  in  the  bids  of  employment  agencies  and 
detective  agencies  to  furnish  strike  breakers  it  is  provided  that 
guards  will  be  furnished  with  each  car  "  to  prevent  escape  in  transit," 
and  by  the  fact  that  when  men  are  candidly  informed  in  the  public 
employment  offices  of  the  existence  of  a  strike,  workers  practically 
never  apply  for  such  positions,  even  though  they  may  be  in  dire 
want. 

The  second  misconception  is  contained  in  the  idea  that  the  "  right 
to  do  business  "  is  an  absolute  right.  Besides  the  fact  that  it  has  only 
been  insisted  upon  by  the  courts  within  the  past  20  years  and  has  no 
express  legislative  or  constitutional  sanction  whatever,  this  right  is 
subject  to  the  most  severe  limitation  and  infringement  even  without 
due  process  of  law.  Not  only  can  the  legislature  limit  the  right  to 
do  business  in  almost  every  conceivable  way,  but  health  authorities 
are  given  power  to  suspend  it  entirely  if  the  public  safety  demands, 
as  in  the  case  of  either  a  human  or  an  animal  epidemic.  Further- 
more, the  courts  can  not  and  will  not  guarantee  in  any  way  the  "  good 
will"  which  is  supposed  to  be  the  property  aspect  of  the  right  to 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  95 

do  business,  nor  will  they  assess  damages  on  account  of  any  alleged 
injury  based  upon  the  "  probable  expectancy  "  of  the  business. 

The  right  to  do  business  is  in  fact  permitted  only  so  far  as  its  ex- 
ercise is  in  the  public  interest,  and  it  may  be  restricted  or  prohibited 
through  the  police  power  whenever  it  is  dangerous  or  in  any  way 
deleterious  to  the  public.  This  is  the  reason  underlying  not  only 
quarantine  but  every  form  of  regulation  and  prohibition. 

The  plea  of  the  workers  for  the  assumption  of  a  new  attitude  in 
relation  to  strike  breakers  is,  however,  based  not  only  upon  the  nega- 
tive character  of  the  rights  of  the  employer  and  the  strike  breaker, 
but  upon  a  positive  though  somewhat  undefinable  demand  for  recog- 
nition that  strikers  have  a  right  to  the  jobs  which  they  have  left  until 
their  grievances  are  in  some  way  adjusted.  The  argument  is  not 
only  that  when  workers  are  willing  to  strike  and  sacrifice  their  liveli- 
hood, the  conditions  against  which  they  protest  must  be  assumed 
to  be  socially  injurious,  but,  even  more,  that  the  worker  who  has 
struck  in  support  of  his  demand  for  better  conditions  has  not  aban- 
doned his  job,  but,  in  fact,  has  a  keener  interest  in  it  than  when 
quietly  submitting  to  distasteful  conditions. 

At  the  very  basis  of  the  workers'  contentions,  however,  lies  the 
realization  that  working  conditions  can  be  improved  only  by  strikes 
and  that  no  strike  can  be  won  if  the  employer  can  operate  his  plant 
without  difficulty.  This  is  becoming  increasingly  true  with  every 
step  in  the  Nation's  industrial  development.  During  more  primi- 
tive periods,  if  workers  struck  their  places  could  not  be  filled  except 
through  the  existence  of  a  surplus  of  qualified  labor  in  the  commu- 
nity or  by  enticing  workers  from  other  employers.  Now,  the  devel- 
opment of  transportation,  the  establishment  of  specialized  agencies 
for  supplying  strikebreakers,  and  the  growth  of  large  corporations, 
which  can  shift  employees  from  one  plant  to  another,  have  given 
each  employer  a  command  of  the  labor  market  of  the  entire  country. 
There  are  agencies  in  every  large  city  which  will  contract  to  supply 
any  kind  of  labor  on  short  notice,  while  almost  any  of  the  large  in- 
dustrial corporations  can  either  supply  the  normal  demand  with  one- 
half  or  three-quarters  of  their  plants,  or  recruit  from  the  surplus 
labor  around  their  various  plants  a  skeleton  organization  which  can 
resume  operations  in  a  short  time. 

The  respective  rights  of  employer,  striker,  and  strikebreaker  are 
matters  which  can  not  be  solved  by  any  method  of  cold  reasoning, 
and  should  not  be  solved  except  by  the  force  of  public  opinion  acting 
either  directly  or  through  the  medium  of  their  representatives.  In 
such  matters  we  feel  that  our  action  can  extend  no  further  than  the 
analysis  of  the  issues,  the  presentation  of  the  pertinent  facts,  and  the 
expression  of  such  general  opinions  as  we  may  have  reached. 

We  are  convinced,  however,  that  a  modification  of  the  legislative 
and  judicial  attitude  on  this  question  is  necessary,  and  also  that  in 
the  minds  of  the  public  a  more  general  appreciation  of  the  conten- 
tions of  the  workers  is  already  taking  place. 

A  general  exception  to  this  may  perhaps  exist  in  the  case  of  public 
utilities,  including  not  only  the  services  which  are  commonly  in- 
cluded, but  the  supply  of  milk,  ice,  and  other  similar  necessities. 
The  absolute  dependence  of  the  population  of  modern  cities  upon 
the  noninterruption  of  such  services  has  created  a  widespread  public 


96  BEPOBT  OF   COMMISSION   OX    INDUSTRIAL   RELATIONS. 

demand  for  action  which  will  insure  them  under  all  conditions.  The 
public  may  good-humoredly  walk  during  a  street-car  strike,  but  the 
interruption  of  the  supply  of  food,  fuel,  and  ice  produces  an  atti- 
tude of  public  desperation.  We  confess  that,  under  present  condi- 
tions, no  absolute  insurance  against  its  interruption  by  industrial 
disputes  seems  practicable.  As  long,  certainly,  as  these  services 
are  performed  by  private  corporations,  the  right  of  employees  to 
strike  should  not  and  can  not  constitutionally  be  abrogated  or 
abridged.  Even  under  Government  ownership  and  operation  the 
problem  is  only  slightly  altered  by  the  removal  of  the  incentive  of 
private  profit  for  the  maintenance  of  improper  labor  conditions, 
while  cooperative  operation  is  too  vague  even  for  analysis.  At  pres- 
ent proper  action  seems  to  consist  in  providing,  first,  for  the  most 
effective  possible  means  for  conciliation,  investigation,  and  arbitra- 
tion ;  second,  for  the  use  of  ail  the  leverage  of  public  opinion  to  pro- 
mote reasonableness  on  the  part  of  those  involved  in  the  dispute; 
and,  finally,  for  the  plan  as  outlined  elsewhere  for  defining  clearly 
the  rights  of  the  parties  to  the  dispute  and  the  impartial  but  firm 
enforcement  of  such  rights. 

(d)  The  greatest  disorders  and  most  acute  outbreaks  of  violence 
in  connection  with  industrial  disputes  arise  from  the  violation  of 
what  are  considered  to  be  fundamental  rights,  and  from  the  perver- 
sion or  subversion  of  governmental  institutions. 

This -source  of  acute  unrest  has  been  discussed  at  length  in.  a  pre- 
ceding section,  so  that  at  this  point  it  is  necessary  only  to  summarize 
briefly  its  commonest  manifestations,  and  to  state  that  even  the  lim- 
ited investigations  which  the  commission  has  been  able  to  make  show 
that  practically  every  industrial  State  has  at  some  relatively  recent 
time  permitted  its  institutions  to  be  used  by  one  party  or  the  other 
to  an  industrial  dispute  (almost  without  exception  the  employers)  in 
such  a  way  that  the  rights  of  the  other  party  were  either  nullified  or 
seriously  transgressed. 

It  may  be  said  that  every  governmental  institution  and  function 
has  been  at  some  time  utilized  by  the  stronger  industrial  factor  for 
the  oppression  and  suppression  of  the  weaker,  but  those  which  are 
most  commonly  utilized  are,  first,  the  police,  including  not  only  the 
municipal  police,  the  sheriffs  and  deputies,  the  State  police  and  con- 
stabulary, and  the  militia,  but  the  private  guards,  detectives,  and 
vigilante  organizations,  which  usurp  and  exercise  the  functions  of  the 
police.  The  biased  action  of  the  State  and  municipal  police  seldom 
extends  beyond  the  making  of  unwarranted  arrests,  the  enforcement 
of  unreasonable  rules  regarding  such  matters  as  picketing  and  public 
assemblage,  and  the  use  of  excessive  brutality.  The  State  and 
municipal  police  are  uniformly  paid  by  the  public  and  such  control 
over  their  action  as  exists  is  generally  indirect.  In  the  case  of  the 
other  bodies  mentioned  the  control  is  frequently  direct  and  their 
action  frankly  and  bitterly  partisan.  The  sheriffs  in  many  counties 
deputize  guards  in  the  employment  and  pay  of  corporations,  without 
any  qualifications  and  sometimes  even  without  knowing  their  names. 
Similarly  the  militia  are  at  times  recruited  from  the  guards  and  other 
employees  of  corporations.  The  private  guards,  detectives,  and  vigi- 
lantes are  openly  partisan  and  can  have  no  other  purpose  in  con- 
nection with  a  strike  than  to  break  it  with  such  means  as  they  can 
command. 


REPORT  OF   COMMISSION   ON  IlNDUSTRIAL   RELATIONS.  97 

The  police  would,  however,  be  much  less  effective  if  their  control 
in  a  given  locality  did  not  usually  imply  also  control  of  all  or  part 
of  the  local  courts  to  give  a  legal  sanction  to  lawlessness,  to  protect 
these  who  are  criminally  liable,  and  to  exercise  their  full  rigor  in 
the  prosecution  of  the  strikers.  Such  controlled  courts  have  not  only 
found  it  possible  through  the  use  of  blanket  injunctions  to  make 
illegal  acts  which  would  otherwise  be  legal,  but,  resting  upon  their 
protection,  the  police,  the  deputies,  the  militia,  and  the  private 
guards  have  in  many  cases  felt  free  to  go  to  unbelievable  lengths  in 
order  to  carry  out  their  plans. 

The  subserviency  of  the  courts  in  many  parts  of  the  country  can 
not  be  more  clearly  shown  than  by  the  fact  that  they  have  time  and 
again  permitted  the  militia,  under  color  of  so-called  martial  law, 
to  usurp  their  functions  and  to  defy  their  associations  who  resisted 
the  encroachment.  The  situation  is  accentuated  also  by  the  fact  that 
the  decisions  of  such  corrupt  and  subservient  courts  become  the  basis 
upon  which  later  honest  "record  worshipping"  judges  form  their 
own  opinions.1 

When  governmental  institutions  are  thus  corrupted  and  used  as  in- 
struments of  oppression  men  can  only  resist  with  such  power  as  they 
have,  not  alone  for  the  protection  of  themselves  and  their  families 
but  for  the  preservation  of  the  fundamental  rights  of  themselves 
and  their  fellow  citizens.  Resistance  to  the  usurpers  of  governmental 
power  and  to  those  who  pervert  to  base  uses  the  official  power  with 
which  they  are  clothed  was  made  the  keystone  of  the  American 
Nation,  and  Abraham  Lincoln,  on  a  most  solemn  occasion,  said: 

If  by  the  mere  force  of  numbers  a  majority  should  deprive  a  minority  of  any 
clearly  written  constitutional  right,  it  might,  in  a  moral  point  of  view,  justify 
revolution — certainly  would  if  such  a  right  were  a  vital  one.2 

The  grave  danger  in  the  United  States  is  that  on  account  of  the 
enormous  area  and  the  sense  of  isolation  of  each  section  as  regards 
the  others,  the  encroachment  upon  fundamental  rights  and 'the  sub- 
version of  local  governments  will  be  permitted  to  gain  ground  with- 
out the  effective  protest  of  the  entire  Nation  until  the  liberties  of  all 
itizens  are  hanging  in  the  balance. 


STATE  CONSTABULARY. 


6.  The  commission  devoted  a  great  deal  of  attention  to  the  ques- 
tion of  a  State  constabulary  as  a  method  of  policing  industry.  Ex- 
tensive investigations  of  the  "organization,  personnel,  and  activities 
of  the,  Pennsylvania  State  Constabulary  were  made  and  a  number  of 
witnesses  were  heard  at  length.  The  findings  with  regard  to  this 
particular  police  organization  may  be  briefly  stated:  It  is  an  ex- 
tremely efficient  force  for  crushing  strikes,  but  it  is  not  successful  in 
preventing  violence  in  connection  with  strikes,  in  maintaining  the 
legal  and  civil  rights  of  the  parties  to  the  dispute,  nor  in  protecting 
the  public.  On  the  contrary,  violence  seems  to  increase  rather  tham 
diminish  when  the  constabulary  is  brought  into  an  industrial  dis- 

1  See   report   of  B.   F.   Moore :  Application   of   Writ   of   Habeas    Corpus   in   Labor   and 
fonlabor  Cases. 

2  Inaugural  address,  Mar.  4,  18G1. 

38810°— 16 7 


98  REPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS. 

pute;  the  legal  and  civil  rights  of  the  workers  have  on  numerous 
occasions  been  violated  by  the  constabulary ;  and  citizens  not  in  any 
way  connected  with  the  dispute  and  innocent  of  any  interference  with 
the  constabulary  have  been  brutally  treated,  and  in  one  case  shot 
down  by  members  of  the  constabulary,  who  have  escaped  punishment 
for  their  acts.  Organized  upon  a  strictly  military  basis,  it  appears 
to  assume  in  taking  the  field  in  connection  with  a  strike  that  the 
strikers  are  its  enemies  and  the  enemies  of  the  State,  and  that  a  cam- 
paign should  be  waged  against  them  as  such. 

There  are  certain  features  of  the  State  police  system,  however, 
which  seem  to  be  preferable  to  the  present  haphazard  methods  of 
policing  strikes.  It  is  desirable,  first,  that  all  kinds  of  police  should 
receive  their  entire  compensation  from  the  State;  second,  an  or- 
ganized force,  whose  records  are  known,  is  preferable  both  to  the 
private  police  of  corporations  and  to  the  deputies  ordinarily  sworn  in 
by  sheriffs ;  third,  it  is  desirable  that  the  force  should  be  strictly  dis- 
ciplined and  subject  to  definite  orders;  fourth,  it  is  desirable  that 
those  in  command  of  any  police  force  should  have  a  reasonable  secure 
tenure  of  office  and  should  have  had  previous  experience  under  similar 
circumstances,  as  an  inexperienced  person  is  likely  to  become  panic 
stricken  by  the  mere  presence  of  crowds,  regardless  of  their  actions. 

If  these  desirable  features  could  be  combined  with  other  features 
which  would  insure  their  impartiality  during  industrial  disputes,  and 
raise  their  ideals  from  the  present  militaristic  basis  to  the  police 
basis  of  preserving  the  peace  and  protecting  the  rights  of  both  parties 
and  the  public,  the  establishment  of  State  police  systems  for  use  in 
connection  with  industrial  disputes  might  be  recommended.  But 
under  present  conditions,  it  seems  desirable  rather  to  leave  the  State 
policing  of  industrial  disputes  to  the  sheriffs  and  the  militia  if  the 
restrictions  hereinafter  suggested  are  rigidly  enforced  so  as  to  pro- 
tect both  the  organization  and  the  personnel  from  partisanship. 

FREE  SPEECH. 

7.  One  of  the  greatest  sources  of  social  unrest  and  bitterness  has 
been  the  attitude  of  the  police  toward  public  speaking.  On  numer- 
ous occasions  in  every  part  of  the  country  the  police  of  cities  and 
towns  have,  either  arbitrarily  or  under  the  -cloak  of  a  traffic  ordi- 
nance, interfered  with  or  prohibited  public  speaking,  both  in  the 
open  and  in  halls,  by  persons  connected  with  organizations  of  which 
the  police  or  those  from  whom  they  receive  their  orders  did  not  ap- 
prove. In  many  instances  such  interference  has  been  carried  out 
with  a  degree  or  brutality  which  would  be  incredible  if  it  were  not 
vouched  for  by  reliable  witnesses.  Bloody  riots  frequently  have 
accompanied  such  interference,  and  large  numbers  of  persons  have 
been  arrested  for  acts  of  which  they  w^ere  innocent  or  which  were 
committed  under  the  extreme  provocation  of  brutal  treatment  of 
police  or  private  citizens. 

In  some  cases  this  suppression  of  free  speech  seems  to  have  been 
the  result  of  sheer  brutality  and  wanton  mischief,  but  in  the  majority 
of  cases  it  undoubtedly  is  the  result  of  a  belief  by  the  police  or  their 
superiors  that  they  were  "  supporting  and  defending  the  Govern- 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  99 


ment"  by  such  an  invasion  of  personal  rights.  There  could  be  no 
greater  error.  Such  action  strikes  at  the  very  foundation  of  govern- 
ment. It  is  axiomatic  that  a  government  which  can  be  maintained 
only  by  the  suppression  of  criticism  should  not  be  maintained.  Fur- 
thermore, it  is  the  lesson  of  history  that  attempts  to  suppress  ideas 
result  only  in  their  more  rapid  propagation. 

•  Not  only  should  every  barrier  to  the  freedom  of  speech  be  removed, 
as  long  as  it  is  kept  within  the  bounds  of  decency  and  as  long  as  the 
penalties  for  libel  can  be  invoked,  but  every  reasonable  opportunity 
should  be  afforded  for  the  expression  of  ideas  and  the  public  criti- 
cism of  social  institutions.  The  experience  of  Police  Commissioner 
Woods,  of  New  York  City,  as  contained  in  his  testimony  before  this 
commission,  is  convincing  evidence  of  the  good  results  which  follow 
such  a  policy.  Mr.  Woods  testified  that  when  he  became  commis- 
sioner of  police  he  found  in  force  a  policy  of  rigid  suppression  of 
radical  street  meetings,  with  the  result  that  riots  were  frequent  and 
bitter  hatred  of  the  police  was  widespread.  He  adopted  a  policy  of 
not  only  permitting  public  meetings  at  all  places  where  traffic  and 
the  public  convenience  would  not  be  interfered  with,  but  instructing 
the  police  to  protect  speakers  from  molestation ;  as  a  result,  the  riot- 
ing entirely  ceased,  the  street  meetings  became  more  orderly,  and  the 
speakers  were  more  restrained  in  their  utterances. 

It  is  suggested  that  the  commission  recommend  as  measures  de- 
signed not  only  to  remove  the  causes  which  lead  to  violence  but  to 
promote  the  impartial  and  effective  action  of  police  during  disputes : 

1.  The  enactment  by '  Congress  of  a  statute  prohibiting,   under 
severe  penalties,  the  transportation  of  men  from  State  to  State,  either 
under  arms  or  for  the  purpose  of  arming  them,  as  guards  or  as  agents 
either  of  employers  or  of  employees. 

2.  The  enactment  by  Congress  of  a  statute  prohibiting  the  ship- 
ment in  interstate  commerce  of  cannon,  gatling  guns,  and  other  guns 
of  similar  character,  which  are  not  capable  of  personal  use,  when 
consigned  to  anyone  except  military  agencies  of  the  State  or  Federal 
Governments. 

3.  The  regulation  or  prohibition  of  private  detective  agencies  and 
private  employment  agencies  as  hereinbefore  suggested. 

4.  The  strict  enforcement  in  all  public  and  private  employment 
offices  of  the  rules  requiring  full  notice  of  the  existence  of  a  strike. 

5.  The  complete  assumption  by  the  States  and  municipalities  of  the 
responsibility  for  policing,  and  the  prohibition  of  the  maintenance 
of  any  private  police  (except  a  limited  number  of  watchmen  without 
police  power  except  on  premises). 

6.  The  definition  by  statute,  by  the  States,  of  the  conditions  under 

k  which  sheriffs  may  deputize,  such  regulations  to  include  provisions 
that  a  deputy  must  be  a  bona  fide  resident  of  the  State,  that  a  sworn 
statement  of  the  complete  activities  of  each  deputy  covering  a  period 
of  10  years  immediately  preceding  his  deputization  shall  be  filed  with 

I  the  secretary  of  state,  that  no  person  who  shall  have  been  convicted  of 
any  misdemeanor  or  who  shall  have  been  imprisoned  in  any  State 
shall  be  deputized,  and  that  no  deputy  shall  receive  any  money  or  any 
other  thing  of  value  from  any  person  connected  with  an  industrial 
dispute  during  his  period  of  service  or  in  connection  therewith. 


100  EEPOET  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

7.  The  enactment  of  statutes,  by  the  States,  providing  a  uniform 
code  governing  the  militia  and  embodying  the  following  principles : 

(a)  A  proclamation  of  martial  law  or  a  state  of  war,  insurrec- 
tion, or  rebellion,  by  the  governor  of  a  State,  as  the  result  of  an  in- 
dustrial dispute,  shall  have  no  effect  upon  the  continuance  of  consti- 
tutional guaranties  of  the  State  and  Federal  Constitutions,  nor  upon 
the  law  and  statutes,  nor  upon  the  jurisdiction  of  the  courts,  nor  upon 
other  civil  authorities. 

(6)  The  writ  of  habeas  corpus  or  other  process  of  the  courts  can 
not  be  suspended,  interfered  with,  nor  disregarded  by  the  military. 
It  is  part  of  the  duty  of  the  military  to  assist  in  enforcing  the  process 
and  decrees  of  the  civil  courts. 

(c)  The  ordinary  courts  shall  have  exclusive  jurisdiction  for  the 
punishment  of  crime,  and  in  all  cases  where  the  same  act  constitutes 
an  indictable  offense  under  both  military  and  criminal  law,  court- 
martials  shall  have  no  jurisdiction  nor  authority  to  try  officers  or 
soldiers  accused  thereof,  but  the  offender  shall  be  turned  over  to  the 
civil  magistrate  for  trial. 

(d)  The  military  may  not  hold,   detain,   nor  imprison  persons 
arrested  by  them  any  longer  than  is  necessary  to  hand  them  over  to 
the  civil  authorities.    No  person  arrested  by  the  militia  shall  be  de- 
tained after  noon  of  the  following  day  without  being  brought  before 
a  committing  magistrate. 

(e)  The  military  may  not  forcibly  enter  nor  search  a  private  house 
in  order  to  -seize  arms  or  other  property  concealed  therein  without 
a  search  warrant. 

(/)  The  military  shall  have  no  authority  to  establish  a  censorship 
over  the  press  nor  to  interfere  with  the  publication  of  newspapers, 
pamphlets,  handbills,  or  the  exercise  of  the  right  of  free  speech, 
except  under  process  of  the  courts. 

(g)  The  military  shall  not  limit,  restrict,  nor  interfere  with  the 
freedom  of  movement  of  peaceable  citizens  or  the  rights  of  public 
meeting,  assemblage,  or  parades  in  streets  and  public  highways  or 
elsewhere,  except  under  due  process  of  law. 

(Ji)  Every  military  officer  under  whose  orders  a  civilian  is  ar- 
rested shall  within  24  hours  thereafter  report  in  writing  to  the  com- 
manding officer  the  name  of  the  prisoner,  the  offense  with  which  he  is 
charged,  and  what  disposition  has  been  made  of  him.  Failing,  he 
shall  be  liable  to  such  punishment  as  a  court-martial  may  direct. 

(i)  In  times  of  industrial  disputes  no  private  guards,  detectives, 
nor  employees  of  either  of  the  contending  parties  shall  be  enlisted 
or  employed  as  members  of  the  militia,  and*  all  persons  found  by  the 
commanding  officer  to  be  in  the  employment  of  either  party  to  a 
dispute  or  actuated  by  animosity  or  personal  ill  will  toward  either  of 
the  contending  parties  shall  be  forthwith  released  from  active  service. 

(j)  The  governor  may,  in  times  of  disturbance,  by  proclamation 
forbid  the  sale  or  transportation  of  firearms,  ammunition,  and  in- 
toxicating liquors,  and  may  require  all  firearms  and  other  weapons 
to  be  deposited  with  the  military  at  certain  places,  receipts  being 
given  therefor.  Proper  search  warrants  may  be  issued  to  discover 
concealed  weapons. 

8.  That  the  States  and  municipalities  should  provide  by  law  for 
the  fullest  use  of  schools  and  other  public  buildings  for  public  meet- 
ings and  lectures  and  for  other  similar  purposes. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  101 

X.  THE  CONDITIONS  AND  PROBLEMS  OF  MIGRATORY  LABORERS. 

It  has  been  found  as  a  result  of  the  commission's  investigations, 
which  were  made  chiefly  by  Mr.  P.  A.  Speek : 

1.  There  are  large  numbers  of  American  workers,  in  all  prob- 
ability several  millions,  who  are  not  definitely  attached  either  to  any 
particular  locality  or  to  any  line  of  industry.    These  migratory  work- 
ers are  continually  moving  from  one  part  of  the  country  to  another 
as  opportunity  for  employment  is  presented. 

The  great  movements  of  these  workers  are  seasonal  in  character, 
as,  for  example,  the  movement  of  harvest  hands  during  the  summer 
and  autumn,  the  movement  to  the  lumber  and  ice  camps  in  the 
winter,  and  the  movement  to  the  construction  camps  in  the  spring 
and  summer.  In  addition  there  are  large,  irregular  movements  of 
laborers  W7hich  are  produced  by  the  depression  in  different  trades 
and  localities,  and  movements  due  to  false  rumors  about  opportuni- 
ties and  to  the  men's  acquired  habits  of  migration. 

2.  The  number  of  these  migratory  workers  seems  to  be  increasing 
not  only  absolutely  but  relatively.    'There  are  no  available  figures  to 
show  this  conclusively,  but  it  is  the  general  opinion  of  students  of 
the  subject  and  of  the  migratory  workers  themselves  that  a  rapid  in- 
crease in  their  number  is  taking  place. 

3.  A   considerable   proportion   of  these   migratory   workers    are, 
unquestionably^  led  to  adopt  this  kind  of  a  life  by  reason  of  per- 
sonal characteristics  or  weaknesses,  and  these  personal  weaknesses 
are   accentuated  rather  than   diminished   by  the  conditions  under 
which  they  live  and  work.     Nevertheless,  even  if  the  migratory 
workers  wrere  all  men  of  the  highest  character  and  reliability,  there 
would  still  be  a  demand  from  our  industries  for  the  movement  of 
the  population  in  almost  as  great  numbers  as  at  present,  in  order 
to  supply  seasonal  demands  and  to  take  care  of  the  fluctuations  of 
business. 

4.  An  increasingly  large  number  of  laborers  go  downward  instead 
cf  upward.     Young  men,  full  of  ambition  and  high  hopes  for  the 
future,  start  their  life  as  workers,  but  meeting  failure  after  failure  in 
establishing  themselves  in  some  trade  or  calling,  their  ambitions  and 
hopes  go  to  pieces,  and  they  gradually  sink  into  the  ranks  of  migra- 
tory and  casual  workers.    Continuing  their  existence  in  these  ranks, 
they  begin  to  lose  self-respect  and  become  "hoboes."     Afterwards, 
acquiring  certain  negative  habits,  as  those  of  drinking  and  begging, 
and  losing  all  self-control,  self-respect,  and  desire  to  work,  they  be- 
come "  down-and-outs  " — tramps,  bums,  vagabonds,  gamblers,  pick- 
pockets, yeggmeu,  and  other  petty  criminals — in  short,  public  para- 
sites, the  number  of  whom  seems  to  be  growing  faster  than  the  gen- 
eral population. 

5.  The  movement  of  these  migratory  workers,  at  the  present  time, 
is  practically  unorganized  and  unregulated.    Workmen  in  large  num- 
bers go  long  distances  in  the  hope  of  finding  employment  on  the  basis 
of  a  mere  rumor,  and  frequently  find  that  there  is' either  no  work  or 
work  for  only  a  few.    At  the  same  time  the  demand  for  labor  in  a 

f~:ven  locality  or  industry  remains  unfilled,  because  the  workers  have 
iled  to  hear  of  the  opportunity.  In  fact,  a  large  part  of  the  move- 
ent  of  migratory  workers  at  present  is  determined  not  by  the  de- 
ands  of  industry  for  labor,  but  by  the  necessity  to  search  for  work. 


vs 

i 


102  REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

To  illustrate:  A  man  finds  himself  out  of  work  in  a  given  locality 
because  of  the  termination  of  the  busy  season,  because  of  business 
depression,  or  because  of  his  personal  discharge;  he  is  unable  to  se- 
cure employment  in  the  locality,  and  he  has  no  information  regard- 
ing opportunity  for  work  elsewhere.  If  he  remains  in  the  locality- 
he  is  almost  certain  to  be  arrested  as  a  vagrant.  His  only  recourse 
is  to  start  moving,  and  the  direction  of  the  movement  is  usually  de- 
termined by  chance. 

6.  The  attempts  to  regulate  the  movements  of  migratory  workers 
by   local   organizations   have,   without   exception,   proved    failures. 
This  must  necessarily  be  true  no  matter  how  well  planned  or  well 
managed  such  local  organizations  may  be. 

7.  The  problem  can  not  be  handled  except  on  a  national  scale  and 
by  methods  and  machinery  which  are  proportioned  to  the  enormous 
size  and  complexity  of  the  problem. 

The  basic  industries  of  the  county,  including  agriculture  and 
railroad  construction  work,  are  absolutely  dependent  upon  these 
migratory  workers. 

8.  The  conditions  under  which  migratory  workers  live,  both  in  the 
cities  and  at  their  places  of  employment,  are  such  as  to  inevitably 
weaken  their  character  and  physique,  to  make  them  carriers  of  dis- 
ease, and  to  create  in  them  a  habit  of  unsteadiness  and  migration. 

The  provisions  for  housing  and  feeding  workers  in  the  labor 
camps  are  subject  to  severe  criticism,  while  the  lodging  houses  in 
the  large  cities  are  even  worse,  especially  from  the  viewpoint  of 
morals.  One  season  spent  in  a  city  lodging  house  is  generally  suffi- 
cient to  weaken  the  physique  and  destroy  the  moral  fiber  of  even 
the  strongest  man.  Numerous  instances  of  the  spread  of  dangerous 
diseases  by  migratory  workers  also  have  been  brought  to  the  notice 
of  the  commission. 

9.  The  available  information  indicates  clearly  that  even  the  most 
perfect  distribution  of  workers,  in  accordance  with  the  opportunities 
afforded  at  present  by  American  industries,  will  still  leave  enormous 
numbers  unemployed  during  certain  seasons  of  the  year  and  during 
periods  of  industrial  depression. 

10.  The  congregation  of  large  numbers  of  migratory  workers  in 
large  cities  during  the  winter  should  be  avoided,  if  possible,  not  only 
because  they  are  an  unjust  burden  upon  the  cities  but  because  of  the 
degenerating  effects  of  city  life  during  long  periods  of  idleness. 

11.  The  movement  of  migratory  and  seasonal  workers  is  caused 
chiefly  by  the  seasonal  demand  of  industries  and  by  the  men's  search 
for  work,  and,  to  a  degree,  by  their  aimless  desire  to  move  about. 
The  conditions  of  their  transportation  have  become  grave.    Millions 
of  men  annually  have  to,  and  are  allowed  to,  resort  to  such  a  method 
of  movement  as  stealing  rides  on  the  railways.     This  method  of 
transportation  results  in  the  demoralization  and  casualization  of 
workers,  in  their  congestion  in  industrial  and  railway  centers,  in 
waste  of  their  time  and  energy,  in  frequent  bodily  injuries  and 
numerous  fatal  accidents  and  homicides  annually,  while,  at  the  same 
time,  it  serves  but  poorly  the  industrial  demand  for  help. 

12.  When  the  workers  return  to  the  city,  from  labor  camps,  for 
instance,  either  to  rest  or  to  spend  the  time  between  seasons,  they  not 
only  meet  the  unhealthy  and  demoralizing  influence  of  cheap  lodging 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  103 

houses,  saloons,  houses  of  prostitution,  and  other  similar  establish- 
ments in  the  slums,  but  they  fall  easy  prey  to  gamblers,  small  private 
bankers,  and  all  sorts  of  parasites.  As  a  result,  what  earnings  they 
have  left  after  deduction  of  their  living  expenses  at  work  places 
rapidly  disappear,  no  matter  how  large  these  earnings  may  be. 

The  principal  recommendations  for  dealing  with  the  problem  of 
migratory  workers  are  outlined  under  the  head  of  unemployment. 
In  this  immediate  connection,  however,  it  seems  desirable  to  suggest 
three  necessary  measures: 

1.  The  Interstate  Commerce  Commission  should  be  directed  by 
Congress  to  investigate  and  report  the  most  feasible  plan  of  pro- 
viding for  the  transportation  of  workers  at  the  lowest  reasonable 
rates  and,  at  the  same  time,  measures  necessary  to  eliminate  the 
stealing  of  rides  on  railways. 

If  special  transportation  rates  for  workers  are  provided,  tickets 
may  be  issued  only  to  those  who  secure  employment  through  public 
employment  exchanges. 

2.  The  establishment  by  States,  municipalities  and,  through  the 
Department  of  Labor,  the  Federal  Government,  of  sanitary  work- 
ingmen's  hotels  in  which  the  prices  for  accommodation  shall  be  ad- 
justed to  the  cost  of  operation.     If  such  workingmen's  hotels  are 
established,   the   Post   Office   Department   should   establish   branch 
postal  savings  banks  in  connection  therewith. 

3.  The  establishment  by  the  municipal,  State,  and  Federal  Gov- 
ernments of  colonies  or  farms  for  "  down  and  outs,"  in  order  to 
rehabilitate  them  by  means  of  proper  food,  regular  habits  of  living, 
and  regular  work  that  will  train  them  for  lives  of  usefulness.    Such 
colonies  should  provide  for  hospital  treatment  of  cases  which  re- 
quire it. 

XI.  UNEMPLOYMENT. 

The  extent  and  character  of  unemployment  has  been  briefly  pre- 
sented in  a  previous  section,  but  the  discussion  there  dealt  only 
with  the  larger  aspects  of  the  situation  in  general  terms.  It  re- 
mains to  present  at  this  point,  in  summary  fashion,  the  ^  findings 
which  have  resulted  from  the  extensive  investigations  which  have 
been  conducted  for  the  commission,  principally  under  the  direction 
of  Dr.  William  M.  Leiserson,  together  with  certain  specific  recom- 
mendations relating  to  the  organization  of  the  labor  market  and  the 
regularization  of  employment. 

EXTENT  AND   CHARACTER   OF  UNEMPLOYMENT. 

1.  Wage  earners  in  the  principal  manufacturing  and  mining  in- 
dustries in  the  United  States  lose  on  the  average  from  one-fifth  to 
one-fourth  of  the  working  time  during  the  normal  year. 

This  is  the  conclusion  indicated  by  an  examination  of  practically 
all  of  the  published  material,  and  of  the  hearings  of  the  commission, 
relating  to  loss  of  time,  irregularity  of  employment,  and  unem- 
ployment. 

2.  Excluding  the  extremely  seasonal  industries,  such  as  canning, 
harvesting,   lumber   cutting   and   logging,   which   operate   normally 
only  a  part  of  the  year,  the  amount  of  lost  working  time  varies 


104  REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

greatly  for  workers  in  different  industries  and  in  different  occu- 
pations and  trades.  Loss  of  time  appears  to  be  greatest  in  bitumin- 
ous coal  mining,  iron  and  steel  manufacturing,  leather,  woolen  and 
worsted  clothing,  slaughtering  and  meat  packing,  and  in  other  in- 
dustries where  the  proportion  of  unskilled  labor  is  large. 

3.  It  has  been  found  that  the  lowest-paid  worker  is  subject  to  the 
greatest  loss  in  working  time,  not  simply  because  he  is  unskilled  but 
also  because  he  is  poorly  nourished  and  weakened  by  the  effects  of 
unfavorable  conditions  of  living  and,  in  many  instances,  by  unbear- 
ably severe  conditions  of  work. 

The  tendency  in  the  evolution  of  modern  industry  toward  the  em- 
ployment of  a  larger  proportion  of  unskilled  labor,  as  well  as  the 
fact  that  many  industries  have  come  into  existence  because  of  the 
availability  of  a  supply  of  casual  laborers  and  of  woman  and  child 
workers  who  are  willing  to  work  for  less  than  subsistence  wages, 
points  to  a  greater  degree  of  irregularity  of  employment,  unemploy- 
ment, and  less  of  working  time,  than  ever  before. 

4-.  The  actual  number  or  proportion  of  workers  at  any  given  time 
who  are  unable  to  work  can  not  be  estimated,  because  of  the  lack  of 
adequate  data  in  this  country.  Recent  investigations  by  Federal 
authorities  and  the  statements  of  competent  authorities  before  the 
commission,  however,  prove  beyond  doubt  that  the  number  of  unem- 
ployed persons  even  in  normal  times  is  appallingly  great.  The  sta- 
tistics of  highly  organized  trades  show  that  even  in  times  of  greatest 
industrial  activity  there  is  a  considerable  percentage,  ranging  from, 
7  to  15  per  cent  of  all  of  the  members  of  unions  in  different  trades 
and  industries,  of  workers  who  are  unemployed  during  the  year.  In 
any  }rear  the  unemployed  who  congregate  in  the  large  cities  alone 
during  the  winter  months  number  several  hundred  thousand,  while 
in  years  of  industrial  depression  the  number  of  unemployed  in  the 
entire  country  is  at  least  three  million. 

5.  The  loss  in  working  time  is  of  two  principal  classes:  Lack  of 
work  and  sickness.    Lack  of  work,  which  may  mean  the  inability  of 
the  worker  to  find  employment  as  well  as  the  absence  of  a  demand 
for  labor  of  any  particular  kind  or  even  of  all  kinds,  either  in  a 
locality  or  section  or  in  the  country  as  a  whole,  accounts  for  approxi- 
mately two-thirds  of  the  average  worker's  loss  of  time  at  work, 
according  to  the  available  data  on  this  point ;  ill  health,  according  to 
several  intensive  investigations  of  wage  wrorkers  and  their  families 
and  the  examination  of  the  sick  records  of  nearly  a  million  wage 
earners  in  this  country,  accounts  for  approximately  one-fourth  of 
the  loss  in  working  time.    Strikes  appear  to  be  the  cause  of  less  than 
two  per  cent  of  the  loss  in  working  time,  and  accidents  are  the  cause 
in  about  the  same  proportion. 

6.  In  addition  to  the  two  basic  causes  of  unemployment — unjust 
distribution  of  income  and  land  monopolization — which  were  ana- 
lyzed in  detail  in  an  earlier  section  of  the  report,  the  following 
causes  demand  attention: 

(a)  Evolutionary  changes  in  industry  and  in  social  habits  and 
movements  which  affect  the  character  and  the  extent  of  the  demand 
for  labor  as  well  as  the  character  and  the  quantity  of  the  supply  of 
labor.  These  include  changes  in  industrial  structure  and  methods — 
such  as  the  increase  or  decrease  in  the  demand  for  labor  in  certain 
industries  and  localities,  the  introduction  of  machinery  and  new 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  105 

processes,  and  the  changes  in  the  character  of  the  demand  for  labor — 
and  changes  in  the  organization  of  industry.  The  character  and 
quantity  of  the  supply  of  labor  have  been  affected  by  immigration 
and  by  the  entrance  into  industry  of  women  workers,  both  of  which 
factors  have  caused  an  increase  in  the  supply  of  cheap  and  unskilled 
labor.  To  some  extent,  however,  the  labor  supply  is  fluid  because 
of  the  ease  with  which  considerable  proportions  of  immigrants  can 
withdraw  from  the  labor  market  by  returning  to  their  homes  in 
times  of  industrial  inactivity. 

(b)  Variations  in  the  demand  for  labor  due  to  fluctuations  and 
irregularities  in  industry.    Industrial  fluctuations  may  be  classed  as 
cyclical  and  seasonal.    Cyclical  fluctuations  result  from  business  de- 
pressions and  at  times  double  the  amount  of  loss  of  time  during  a 
year,  which  is  illustrated  by  the  fact  that  the  railroads  employed 
236,000  fewer  men  in  1908  than  in  1907.    Seasonal  fluctuations  may 
either  be  inappreciable,  as  in  municipal  utilities,  or  may  displace 
nearly  the  entire  labor  force.    The  seasonal  fluctuations  in  the  can- 
ning industry  in  California,  for  example,  involve  nearly  nine-tenths 
of  all  the  workers;  in  logging  camps,  which  depend  upon  the  snow, 
operations  are  practically  suspended  in  summer;  while  in  the  brick 
and  tile  industry  only  36.5  per  cent  of  the  total  number  of  employees 
are  retained  during  the  dull  season.    Irregularities  in  the  conduct  of 
industry  and  in  the  method  of  employing  labor  are  evident  in  dock 
work,  in  the  unskilled  work  in  iron  and  steel,  and  in  slaughtering 
and  meat  packing;  in  the  competitive  conditions  in  industries  which 
force  employers  to  cut  labor  cost  down  to  the  utmost  and  to  close 
down  in  order  to  save  operating  expenses;  in  speculative  practices 
which  result  in  the  piling  up  of  orders  and  alternate  periods  of  rush 
production  and  inactivity ;  in  loss  of  time  due  to  inefficient  manage- 
ment within  plants.     In  some  cases  it  has  been  charged  although 
without  definite  proof,  that  irregularity  of  employment  is  due  to  a 
deliberate  policy  of  employers  in  order  to  lessen  the  chance  of  organ- 
ized movement,  as  well  as  to  keep  the  level  of  wages  down  in  un- 
skilled occupations  by  continually  hiring  new  individuals, 

(c)  Conditions  determining  the  worker's  ability  to  grasp  or  retain 
the  opportunity  to  be  employed  which  industry  offers.    Among  these 
conditions  are  ill  health,  old  age,  deficiencies  in  industrial  training, 
lack  of  facilities  by  which  the  worker  and  the  job  can  be  brought 
together,  factors  causing  immobility  in  the  labor  supply  and  its  in- 
ability to  adjust  itself  to  changes  in  the  character  of  the  demand  for 
labor,  and  those  personal  factors,  such  as  dishonesty,  laziness,  intem- 
perance, irregularity,  shiftlessness  and  stupidity,  which   are  com- 
monly included  under  the  term  "  deficiencies  of  character."    By  no 
means  are  all  of  these  conditions  under  the  control  of  the  worker; 
in  fact,  the  further  investigation  goes  the  greater  appears  the  re- 
sponsibility which  society  and  the  employer  bear  for  the  conditions 
that  determine  the  worker's  ability  to  retain  whatever  employment 
industry  is  able  to  offer  regularly. 

7.  The  effects  of  the  loss  in  working  time  and  the  attendant 
irregularity  of  employment  may  be  summed  up  in  the  term  "the 
workers'  economic  insecurity."  Specifically  the  effects,  as  shown  by 
study  of  the  results  of  various  investigations  and  by  testimony 
jfore  the  commission,  may  be  summarized  as  follows: 


106  KEPOET  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

(a)  Actual  loss  of  earnings,  which  in  turn  results  in  the  necessity 
for  the  supplementing  of  family  income  by  the  earnings  of  women 
and  children,  and  by  payments  from  boarders  and  lodgers  whose 
presence  is  inimical  to  family  life. 

(b)  The  depression  of  the  wage  level,  in  some  instances,  and  the 
preventing  of  higher  wages. 

(c)  Waste  in  expenditure,  due  to  irregularity  of  family  income. 

(d)  Deleterious  effects  upon  the  worker,  such  as  demoralization, 
worry,  loss  of  skill,  irregularity  of  habits,  etc. 

(e)  The  gradual  loss  of  economic  status  by   workers  who   are 
thrown  out  of  employment  and  the  inevitable  drift  of  a  large  propor- 
tion into  the  class  ordinarily  known  as  "  casual  laborers,"  the  con- 
stant recruiting  of  the  large  army  of  dependents  and  delinquents 
who  compose  the  unemployables,  and  the  general  loss  of  national 
efficiency  that  so  great  a  number  of  incapable  citizens  must  entail. 

{/)  The  existence  of  a  supply  of  casual  laborers  and  irregularly 
employed  women  and  children,  upon  which  parasitic  industries,  un- 
able to  exist  unless  they  pay  wages  below  the  standard  of  decent 
subsistence,  are  called  into  being. 

EXISTING  CONDITIONS  OF  EMPLOYMENT. 

8.  In  addition  to  the  large  variations  which  affect  entire  indus- 
tries, there  is  an  ever  present  and  equally  difficult  problem  in  the 
unsteadiness  of  employment.  The  existing  methods  of  hiring  and 
discharging  employees,  and  the  constant  changing  of  positions  by 
th«  workers  themselves,  divide  the  work  among  a  much  larger  num- 
ber of  employees  than  are  actually  needed.  Instead  of  one  person 
being  employed  where  there  is  work  for  but  one,  several  are  hired 
during  the  course  of  the  year  to  occupy  the  same  position.  Thus  an 
investigation  of  the  cloak  and  suit  industry  of  New  York  showed 
that  the  maximum  number  of  employees  in  16  occupations  during 
any  week  of  the  year  was  1,952.  Actually,  however,  the  pay  rolls 
showed  that  4,000  people  were  employed  in  these  occupations.  This 
"  turnover  "  of  the  labor  force,  the  constant  shifting  from  job  to  job, 
the  dropping  and  hiring  of  men,  is  peculiar  to  no  industry.  It  is 
found  everywhere,  among  women  as  well  as  men,  and  it  is  a  kind  of 
irregularity  of  employment  that  is  a  constant  factor.  A  large  mail- 
order house  which  began  the  year  with  about  10,500  employees  and 
ended  with  about  the  same  number,  engaged  during  that  year  8,841 
people  in  order  to  maintain  their  force.  A  manufacturing  estab- 
lishment employing  in  1913  an  average  of  7,200  people,  hired  6,980 
during  that  year.  An  automobile  factory  was  reported  in  1912  to 
have  hired  21,000  employees  in  order  to  maintain  an  operating  force 
of  10,000.  A  large  steel  plant  employing  about  15,000  men  hires 
normally  an  equal  number  to  maintain  that  force.  During  the  years 
when  it  wanted  to  increase  the  force  three  and  one-half  times  as  many 
were  hired  as  were  actually  needed  to  make  up  the  increase.  In 
some  lumber  camps  and  sawmills  on  the  Pacific  coast  all  men  are 
discharged  twice  a  year,  in  July  and  December,  and  complete  new 
forces  are  hired  when  work  is  resumed.  In  the  logging  camps  it  is 
customary  to  hire  five  men  in  the  course  of  the  season  to  keep  one 
job  filled. 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  107 

A  manager  of  a  large  electrical  works  made  a  study  of  a  group  of 
representative  factories  (large,  small,  and  medium)  in  the  mechan- 
ical industries  and  found  that  to  increase  their  working  force  by 
8,128  people  in  the  year  1912,  they  actually  hired  44,365  people ;  that 
is  to  say,  five  and  one-half  times  the  number  actually  needed  to  make 
up  the  increase  were  hired  and  36,237  were  dropped  from  the  rolls 
for  one  reason  or  another. 

9.  Detailed  investigations  show  that  a  majority  of  the  employees 
dropped  from  the  pay  rolls  leave  of  their  own  accord.    But  there  is 
no  doubt  that  many  of  them  leave  because  they  were  hired  to  do  work 
for  which  they  were  unfitted;  arid  many  others,  without  actually 
being  discharged,  leave  because  work  is  slack  or  threatens  to  become 
slack.    In  the  lower  paid  and  more  disagreeable  jobs  there  is  almost  a 
constant  shifting  of  employees  because  no  one  works  at  these  jobs 
except  during  those  periods  when  he  is  helpless  and  can  get  no  other 
work.    Whatever  the  reason  is  for  the  men  quitting,  there  is  no  doubt 
that  conditions  of  employment  and  methods  of  hiring  and  discharg- 
ing employees  have  very  much  to  do  with  causing  a  large  "  turnover  " 
of  the  labor  forces.     Those  employers  who  have  given  attention  to 
this  question  of  hiring  and  discharge  have  been  able  to  reduce  the 
"  turnover  "  very  greatly,  and  thus  make  employment  more  steady. 

10.  The  problem  of  unemployment  has  never  received  adequate 
attention,  apparently  because  it  has  been  believed  generally  that  it 
affected  only  a  small  part  of  the  working  population.    Such  a  belief 
is  absolutely  false.  Not  only  is  practically  every  wage  earner  in  con- 
stant dread  of  unemployment,  but  there  are  few  who  do  not  suffer 
bitterly  many  times  in  their  career  because  they  are  unable  to  get 
work.    Every  year  from  15,000  to  18,000  business  enterprises  fail  and 
turn  their  employees  out;  every  year  new  machinery  and  improved 
processes  displace  thousands ;  cold  weather  and  wet  weather  and  hot 
weather  stop  operations  and  force  wage-earners  into  idleness;  and 
where  there  are  not  these  natural  causes  there  are  the  customs  and 
habits  and  holiday  rushes  which  result  in  overwork  followed  by 
underemployment.     Employers  change  the  locations  of  their  plants 
and  conditions  of  credit  and  currency  cause  depressions  and  shut- 
downs and  short-time  and  part-time  work.    Constantly  the  methods 
of  hiring  and  discharging  employees  are  causing  people  to  be  dropped 
from  the  pay  rolls.    All  these  facts  in  connection  with  the  conserva- 
tive figures  of  fluctuation  in  the  amount  of  employment  prove  that 
"  the  unemployed  "  eventually  include  practically  every  wage-earner, 
and  not  alone  a  surplus  portion. 

11.  Practically  all  wage-earners  are  affected  by  the  fluctuations  of 
industry.    To  count  the  number  of  the  unemployed  at  any  given  time 
becomes  almost  impossible,  since  the  number  is  changing  from  day  to 
day.    The  unemployed  of  to-day  are  the  workers  of  to-morrow,  and 
vice  versa. 

The  permanently  unemployed  are  really  people  who  have  dropped 
out  of  the  ranks  of  industry,  broken  down  by  the  unsteadiness  of 
employment  or  other  causes.  Some  are  mentally  defective  or  physi- 
cally incapable  or  both.  Others  are  "  down  and  outs,"  who  have 
lost  the  habit  of  working.  Still  others  live  by  their  wits,  by  begging, 
or  by  crime.  During  the  most  prosperous  times,  when  labor  is  in 
great  demand,  these  same  people  do  not  work.  They  are  "unem- 


108  REPOET  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

ployed"  in  the  same  sense  that  young  children,  the  old,  and  the  sick, 
and  those  who  live  on  incomes  from  investments,  are  unemployed. 
No  amount  of  work  that  might  be  provided  by  public  or  private 
enterprise  would  have  any  appreciable  effect  on  these  unemployables. 
They  need  hospital  or  corrective  treatment.  In  prosperous  times 
they  are  considered  the  subjects  of  such  treatment,  but  in  every 
period  of  industrial  depression  they  stand  out  as  the  most  conspicuous 
element  in  the  "  army  of  the  unemployed." 

The  failure  to  distinguish  these  unemployables  from  those  who  are 
temporarily  out  of  work  on  account  of  a  slack  season  or  the  failure 
of  a  firm  and  those  casual  workers  who  are  employed  for  part  of 
every  week  or  month,  leads  to  hopeless  confusion. 

12.  The  fluctuations  in  business  affect  capital  as  well  as  labor,  but 
the  result  is  entirely  different.    Capital  suffers  the  same  fluctuations 
and  every  industry  has  its  "peak  loads."     The  essential  differences 
are,  first,  that  a  fair  return  on  investments  is  estimated  by  the  year, 
while  for  labor  it  has  become  more  and  more  customary  to  hire  and 
pay  and  discharge  by  the  week,  day,  or  hour,  or  by  the  piece,  and, 
second,  that  wrhile  capital  can  offset  the  fat  years  against  the  lean, 
the  human  beings  who  are  unemployed  can  not,  but  must  starATe  or 
suffer  a  rapid  physical  and  moral  deterioration.    The  result  is  that 
unless  the  wage  earners  are  very  strongly  organized — and  the  vast 
majority  are  not — they  must  bear  the  whole  burden  of  the  waiting 
period  when  they  must  act  as  a  reserve  force  ready  to  meet  the  maxi- 
mum demand  of  the  busy  season.     We  dp  not  consider  policemen 
unemployed  when  they  are  not  arresting  violators  of  the  peace,  and 
we  do  not  consider  firemen  out  of  work  when  they  sit  in  the  fire- 
houses  prepared  to  do  their  duty.     But  for  most  working  people 
industry  is  still  conducted  on  a  sort  of  volunteer  fire  department 
basis.     In  the  busy  seasons  and  prosperous  years  all  are  desirable 
and  useful  citizens.    At  other  times  they  are  useless  and  worthless, 
so  far  as  our  industries  are  concerned.     They  are  turned  adrift  to 
take  care  of  themselves  and  those  dependent  on  them  as  best  they  can. 

EXISTING  AGENCIES  FOR  EMPLOYMENT. 

13.  The  first  step  in  any  intelligent  attempt  to  deal  with  the  prob- 
lem is  the  organization  of  the  labor  market  on  a  systematic  business- 
like and  efficient  basis. 

14.  Labor  exchanges  can  not  create  work  nor  make  the  existing 
irregular  demand  for  labor  steady  the  year  through,  but  they  can, 
if  properly  managed,  remove  the  unnecessary  loss  of  time  which 
workers  now  suffer  in  passing  from  one  job  to  the  next;  they  can 
eliminate  the  numberless  evils  which  now  characterize  private  em- 
ployment offices ;  and  they  can  provide  the  information  and  adminis- 
trative machinery  which  is  essential  to  every  other  step  in  dealing 
with  the  problem. 

15.  The  absurdity  and  waste  wrhich  characterizes  the  existing  sys- 
tem of  marketing  labor  can  best  be  appreciated  by  imagining  the 
condition   which   would  be  produced  if   every   manufacturer   who 
needed  lathes,  drill  presses,  planers,  and  milling  machines  advertised 
for  them  in  the  papers,  and  many  machines  were  sent  to  him,  out 
of  which  he  could  pick  the  few 'he  wanted.     Yet  that  is  exactly 
what  happens   when   machine   hands,   human  beings,   are   wanted; 


a  r» 


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REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  109 

when  the  calls  go  out  for  harvest  hands  or  when  any  other  class  of 
labor  is  advertised  for.  No  one  knows 'how  many  will  answer  the 
advertisement.  Many  more  than  the  number  needed  respond  to  the 
calls.  The  waste  of  time,  energy,  car  fare,  and  railroad  fare  to  get 
to  the  places  is  enormous.  Often  men  quit  positions  in  the  hope  of 
getting  the  alluringly  advertised  work.  Many  employers  do  not  even 
advertise.  They  simply  hang  the  "  Help  wanted  "  sign  at  the  door 
and  depend  on  people  to  walk  the  streets  and  watch  for  these  signs. 

16.  Wherever  systematic  methods  and  intelligent  organization  and 
direction  are  lacking,  there  evils  creep  in  to  add  to  the  chaos.    That 
is  exactly  what  we  find  has  happened  in  the  labor  market.     The 
saloon  becomes  one  of  the  most  important  places  in  the  country  to  get 
information  about  jobs.     Pool  rooms,  cafes,  grocery  stores,  lodging 
houses,   even  street  corners   and   public   parks   become   improvised 
labor  markets.     In  these  places  many  and  strange  abuses  are  met 
with.     Groundless  rumors  send  people  scurrying  over  the  city  and 
the  country  on  a  wild-goose  chase.    One  job  seeker  sells  information 
to  another,  and  quite  often  it  is  false  or  misleading.     Foremen  sell 
real  or  bogus  jobs  under  their  control.     Fees  for  jobs  are  paid  by 
buying  drinks,  and  "  man  catchers  "  pick  up  victims  to  rob  or  abuse. 

17.  Of  all  the  evils,  the  wild  rumors  regarding  available  jobs  are 
the  greatest.    These  evils  are  increased  by  fake  "  want  ads "  in  the 
newspapers,  untruthful  or  innocently  misleading  advertisements  for 
help,  and  new  stories  intended  to  boost  towns  or  industries  or  to 
attract  large  supplies  of  labor.    Investigators  and  men  who  were  sent 
to  answer  "  want  ads  "  found  many  of  these  inserted  by  employment 
agents  who  had  no  jobs  to  offer  but  who  wanted  to  collect  registra- 
tion fees.    Other  advertisements  were  pure  fakes,  inserted  by  "  white 
slavers,"  bogus  real  estate  and  stock  brokers,  selling  agents  of  "  new 
propositions,"  padrones,  and  other  swindlers.    A  study  of  newspaper 
want  advertisements  made  a  few  years  ago  revealed  that  when  times 
are  good  one-fourth  or  more  are  "  fake  ads,"  while  in  hard  times 
more  than  one-half  are  in  this  class, 

18.  Private  enterprise  has  attempted  to  deal  with  the  situation 
through  the  establishment  of  employment  agencies  which  gather 
information  regarding  opportunities  for  employment  and  sell  the 
information  to  work  seekers  and,  under  certain  conditions,  collect 
fees  also  from  employers.    The  number  of  private  employment  agents 
varies  greatly  from  year  to  year,  but  there  must  be  from  3,000  to 

,000  of  these  labor  middlemen  in  the  country. 

Investigations  show,  however,  that  instead  of  relieving  unemploy- 

ent  and  reducing  irregularity,  these  employment  agencies  actually 
serve  to  congest  the  labor  market  and  to  increase  idleness  and  irregu- 
arity  of  employment.  They  are  interested  primarily  in  the  fees  they 

n  earn,  and  if  they  can  earn  more  by  bringing  workers  to  an  already 
vercrowded  city,  they  do  so.  Again,  it  is  an  almost  universal  custom 
mong  private  employment  agents  to  fill  vacancies  by  putting  in  them 

ople  who  are  working  at  other  places.  In  this  way  new  vacancies 
re  created  and  more  fees  can  be  earned. 

19.  They  also  fail  to  meet  the  problem  because  they  are  so  numerous 
and  are  necessarily  competitive.     With  few  exceptions,  there  is  no 
cooperation  among  them.     This  difficulty  is  further  emphasized  by 

he   necessity   of   paying  the   registration   fees   required  by   many 


110  REPORT  OF   COMMISSION   OIST  INDUSTRIAL   RELATIONS. 

agencies;  obviously  the  laborer  can  not  apply  to  very  many  if  he 
has  to  pay  a  dollar  at  each  one. 

20.  The  fees  which  private  employment  offices  must  charge  are 
barriers  which  prevent  the  proper  flow  of  labor  into  the  channels 
where  it  is  needed  and  are  a  direct  influence  in  keeping  men  idle. 
In  the  summer,  when  employment  is  plentiful,  the  fees  are  as  low 
as  25  cents,  and  men  are  even  referred  to  work  free  of  charge.     But 
this  must  necessarily  be  made  up  in  the  winter,  when  work  is  scarce. 
At  such  times,  when  men  need  work  most  badly,  the  private  em- 
ployment offices  put  up  their  fees  and  keep  the  unemployed  from 
going  to  work  until  they  can  pay  $2,  $3,  $5,  and  even  $10  and  more 
for  their  jobs.     This  necessity  of  paying  for  the  privilege  of  going 
to  work,  and  paying  more  the  more  urgently  the  job  is  needed,  not 
only  keeps  people  unnecessarily  unemployed,  but  seems  foreign  to 
the  spirit  of  American  freedom  and  opportunity. 

21.  An    additional    injustice    inevitably    connected    with    labor 
agencies  which  charge  fees  is  that  they  must  place  the  entire  cost 
of  the  service  upon  those  least  able  to  bear  it.    Employment  agents 
say  that  employers  will  not  pay  the  fees ;  hence  they  must  charge  the 
employees.     Among  the  wage  earners,  too,  however,  those  who  are 
least  in  need  and  can  wait  for  work,  pay  the  least  for  jobs  and  even 
get  them  free,  while  those  who  are  most  in  need  make  up  for  all  the 
rest  and  pay  the  highest  fees.    The  weakest  and  poorest  classes  of 
wage  earners  are  therefore  made  to  pay  the  largest  share  for  a  serv- 
ice rendered  to  employers,  to  workers,  and  to  the  public  as  well. 

22.  The  fees  paid  private  employment  agents  in  California  in  the 
license  year  ending  March  31,  1912,  amounted  to  $403,000.     Using 
these  figures  as  a  rough  basis,  the  fees  for  the  country  as  a  whole 
amount  annually  to  $15,000,000.     This  enormous  sum   of   money, 
which  is  being  paid  chiefly  out  of  the  meager  earnings  of  domestic 
servants,  clerks,  and  unskilled  laborers,  would  be  enough  to  support 
a  system  of  public  exchanges  which  would  bring  order  out  of  the 
existing  chaos. 

23.  There  are  many  private  employment  agents  who  try  to  con- 
duct their  business  honestly,  but  they  are  the  exception  rather  than 
the  rule.    The  business  as  a  whole  reeks  with  fraud,  extortion,  and 
flagrant  abuses  of  every  kind.     The  most  common  evils  are  as  fol- 
lows: 

Fees  are  often  charged  out  of  all  proportion  to  the  service  ren- 
dered. We  know  of  cases  where  $5,  $9,  $10,  and  even  $16  apiece 
has  been  paid  for  jobs  at  common  labor.  In  one  city  the  fees  paid 
by  scrubwomen  is  at  the  rate  of  $24  a  year  for  their  poorly  paid 
work.  Then  there  is  discrimination  in  the  charges  made  for  the 
same  jobs.  Often,  too,  men  are  sent  a  long  distance,  made  to  pay 
fees  and  transportation,  only  to  find  that  no  one  at  that  place  or- 
dered men  from  the  employment  agent.  A  most  pernicious  prac- 
tice is  the  collusion  with  foremen  or  superintendents  by  which  the 
employment  agent  "splits  fees"  with  them.  That  is,  the  foreman 
agrees  to  hire  men  of  a  certain  employment  agent  on  condition  that 
one- fourth  or  one-half  of  every  lee  collected  from  men  whom  he 
hires  be  given  to  him.  This  leads  the  foreman  to  discharge  men 
constantly  in  order  to  have  more  men  hired  through  the  agent  and 
more  fees  collected.  It  develops  the"  "  three-gang "  method  so  uni- 
versally complained  of  by  railroad  and  construction  laborers, 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  Ill 


namely,  one  gang  working,  another  coming  to  work  from  the  em- 
ployment agent,  and  a  third  going  back  to  the  city. 

Finally,  there  is  the  most  frequent  abuse — misrepresentation  of 
terms  and  condition  of  employment.  Men  are  told  that  they  will  get 
more  wages  than  are  actually  paid,  or  that  the  work  will  last  longer 
than  it  actually  will,  or  that  there  is  a  boarding  house  when  there 
really  is  an  insanitary  camp,  or  that  the  cost  of  transportation  will 
be  paid,  when  it  is  to  be  deducted  from  the  wages.  They  are  not  told 
of  other  deductions  that  will  be  made  from  wages;  they  are  not 
informed  about  strikes  that  may  be  on  at  the  places  to  which  they 
are  sent,  nor  about  other  important  facts  which  they  ought  to  know. 
These  misrepresentations,  it  must  be  said,  are  often  as  much  the  fault 
of  the  employer  as  of  the  labor  agent.  Also  the  employer  will  place 
his  call  for  help  with  several  agents,  and  each  will  send  enough  to 
fill  the  whole  order,  causing  many  to  find  no  jobs.  Labor  agents  and 
laborers  alike  are  guilty  of  the  misuse  of  free  transportation  fur- 
nished by  employers  to  prospective  help.  And  it  is  true  also  that 
many  applicants  perpetrate  frauds  on  the  labor  agents  themselves, 
as,  for  example,  causing  them  to  return  fees  when  positions  actually 
were  secured.  This  is  the  result  of  the  general  feeling  that  the  whole 
system  of  paying  fees  for  jobs  is  unjust;  and  if  they  must  pay  in 
order  to  get  work,  then  any  attempt  to  get  the  fee  back  is  justifiable. 

24.  Attempts  to  remove  these  abuses  by  regulation  have  been  made 
in  31  States,  but  with  few  exceptions  they  have  proved  futile,  and  at 
most  they  have  served  only  to  promote  a  higher  standard  of  honesty 
in  the  business  and  have  not  removed  the  other  abuses  which  are 
inherent  in  the  system.    Where  the  States  and  cities  have  spent  much 
money  for  inspectors  and  complaint  adjusters  there  has  been  con- 
siderable improvement  in  the  methods  of  private  employment  agen- 
cies, but  most  of  the  officers  in  charge  of  this  regulation  testify  that 
the  abuses  are  in  "  the  nature  of  the  business "  and  never  can  be 
entirely   eliminated.     They  therefore   favor   the  total   abolition   of 
private  labor  agencies.     This  is  also  the  common  opinion  among 
working  people,  and  in  several  States  attempts  have  already  been 
made  to  accomplish  this  by  law. 

25.  It  is  significant  that  trade  union  members  are  practically  never 
found  among  the  applicants  for  charity  during  periods  of  unemploy- 
ment.   They  may  be  unemployed,  but  they  are  in  some  way  cared  for, 
either  by  having  work  found  for  them  or  by  systematic  or  voluntary 
relief.     Within  each  strongly  organized  trade,  it  may  be  said,  the 
problem  of  connecting  man  and  job  is  cared  for  fairly  well.     The 
union  headquarters  is  the  most  common  labor  market  for  organized 
workers.    Ordinarily,  no  systematic  employment  business  is  done,  but 
many  unions  have  out-of-work  books  in  which  the  unemployed  write 
their  names,  and  it  is  part  of  the  duties  of  the  business  agent  of  every 
union  to  be  on  the  lookout  for  vacancies  and  to  notify  members  seek- 
ing employment  of  the  opportunities.    Many  unions  also  have  travel- 
ing benefits  to  assist  members  in  going  from  place  to  place.     But 
when  it  comes  to  placing  men  outside  of  their  own  trades  the  unions 
are  not  successful  as  employment  offices. 

Partly  for  this  reason  and  partly  for  the  reason  that  only  a  small 
part  of  the  wage  earners  are  in  strongly  organized  trades,  the  trade 
unions  occupy  a  minor  place  in  the  general  labor  market. 


112  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

26.  Within  recent  years  associations  of  employers  have  established 
employment  offices  in  all  the  important  cities  of  the  country.     The 
movement  is  spreading  very  rapidly,  and  there  is  hardly  an  important 
industrial  center  in  the  country  that  has  not  a  bureau  of  this  kind. 
These  offices  are  supported  out  of  the  funds  of  the  employers'  associa- 
tions, and  their  services  are  free  to  working  people.    Most  of  them, 
however,  do  a  very  small  employment  business. 

Almost  all  of  these  offices  owe  their  origin  to  the  movement  among 
employers  to  establish  and  maintain  the  so-called  "  open  shop  "  or 
the  "  antiunion  shop."  Since  their  establishment,  employers  have 
discovered  that  such  offices  are  very  useful  also  in  creating  central 
clearing  houses  for  labor,  "  constituting  the  shortest  cut  between 
supply  and  demand."  This,  however,  is  not  their  primary  purpose, 
for  nowhere  have  they  extended  their  operations  to  include  common 
laborers,  who  suffer  most  from  disorganization  of  the  labor  market. 
These  bureaus  are  merely  divisions  of  the  regular  business  of  the 
employers'  associations,  and  one  of  the  main  purposes  of  these  as- 
sociations is  to  prevent  the  organization  of  their  shops  by  trade- 
unions.  The  employment  bureaus  are  established  and  -maintained  to 
further  this  purpose. 

The  empk^ment  bureaus  maintained  by  employers'  associations, 
therefore,  not  only  are  of  no  practical  value  as  a  means  of  solving 
the  problem  of  unemployment,  but,  on  the  contrary,  because  they  are 
organized  primarily  to  prevent  the  employment  of  skilled  workmen 
who  are  distasteful  to  their  members,  are  actual  barriers  to  the  free 
movement  of  labor. 

27.  In  every  city  there  are  religious  and  charitable  organizations 
which  attempt  to  find  work  for  destitute  persons.     In  connection 
with  the  charity  societies  of  the  larger  cities,  regular  employment 
agencies  are  maintained,  but  very  little  business,  comparatively,  is 
done  by  these  officers.    Working  people  do  not  go  to  them,  and  em- 
ployers do  not  call  for  employees  at  such  offices,  except  occasionally 
for  men  to  do  odd  jobs,  or  when  they  agree  to  place  someone  as  a 
favor  to  the  charity  workers.    The  main  work  of  the  charitable  em- 
ployment offices  is  to  find  odd  jobs  for  the  unemployed  who  can  not 
hold  ordinary  positions.    They  also  help  people  handicapped  by  age, 
illness,  or  other  physical  or  mental  defect.    Their  primary  purpose  is 
charity.    They  may  be  said  to  have  no  effect  whatever  on  employ- 
ment conditions  for  able-bodied  workers. 

Until  the  State  is  ready  and  able  to  take  proper  care  of  its  handi- 
capped, diseased,  and  subnormal  members,  the  charitable  employ- 
ment agencies  and  institutions  will  continue  to  be  necessary,  because 
labor  exchanges  properly  organized  on  a  business  basis,  whether  by 
public  or  by  private  enterprise,  can  not  deal  with  the  handicapped 
classes  of  labor.  Those  who  are  physically  or  mentally  unfit  to  hold 
positions  should  be  sent  to  the  places  where  they  will  get  the  relief 
they  need  and  not  to  work  which  they  would  quit  or  from  which  they 
would  be  dismissed  in  a  few  days. 

PUBLIC   EMPLOYMENT  AGENCIES. 

28.  In  1890  Ohio  created  the  first  public  employment  offices  in  this 
country.     Since  that  time,  such  offices  have  been  established  in  23 
other  States,  and  they  are  now  in  operation  in  about  80  cities.    Most 


I 


EEPOET  OF   COMMISSION   ON   INDUSTRIAL   EELATIONS.  113 


of  them  were  created  by  State  laws ;  a  few  are  municipal  enterprises. 
They  represent  an  expense  to -the  States  and  cities  of  about  $300,000 
annually,  and,  according  to  their  reports,  they  fill  about  500,000  posi- 
tions a  year. 

29.  As  a  result  of  a  very  extensive  investigation  it  has  been  found 
that  the  public  employment  offices  of  the  United  States,  as  a  whole, 
are  issuing  inaccurate  statistics.    They  are  slipshod  in  recording  in- 
formation about  employers  and  employees.    They  cater  too  much  to 
casual  laborers  and  "  down-and-outs,"  thus  driving  away  the  better 
class  of  workers.     Too  many  are  poorly  housed,  with  insufficient 
lighting  and  ventilation.    They  fail  to  supplant  private  agencies  or 
to  lessen  their  exploitation  of  workers.     They  do  not  exchange  in- 
formation even  when  closely  located.    They  fail  to  bring  themselves 
to  public  attention,  either  by  advertising  or  otherwise,  and  they  have 
failed  to  arouse  public  interest  in  their  work.    This  is  true  of  public 
employment  offices  taken  as  a  whole,  but  there  are  some  very  bright 
exceptions.     During  the  last  few  years,  also,  the  labor  departments 
have  been  devoting  more  attention  to  the  work  of  public  employment 
offices,  and  many  improvements  have  resulted  which  show  that  the 
principles  underlying  the  offices  are  sound,  but  that  they  have  not 
been  properly  carried  out. 

30.  The  reasons  for  the  failure  of  most  of  the  public  employment 
offices  are: 

First.  The  inefficiency  and  lack  of  training  of  the  officials  and 
clerks  who  operate  the  agencies.  A  public  employment  office  must 
build  up  its  work  by  soliciting  business  and  giving  service  that  is  felt 
to  be  valuable ;  otherwise  little  attention  will  be  paid  to  it.  For  this 
purpose  men  of  judgment  and  experience  are  necessary  to  carry  on 
the  work.  It  is  a  technical  business  requiring  not  a  mere  shuffling  of 
applications  but  careful  selection  of  applicants  and  thorough  under- 
standing of  the  requirements  of  positions  to  which  they  are  to  be  sent. 

Second.  The  offices  have  generally  .been  regarded  as  political  spoilsf 
with  a  consequent  change  of  personnel  after  each  election. 

Third.  The  salaries  have  been  inadequate  to  attract  competent  men. 

Fourth.  The  public  employment  offices  have  been  the  objects  of 
suspicion,  if  not  of  actual  opposition,  by  employers  and  organized 
labor  as  well.  Union  men  have  feared  that  the  offices  might  be  used 
as  strike-breaking  agencies,  or  to  lower  wage  rates.  Employers,  on 
the  other  hand,  have  feared  that  the  offices  might  be  used  to  fill  their 
shops  with  union  men  and  labor  agitators. 

The  activities  of  the  Federal  Department  of  Labor  in  connection 
with  unemployment  have  been  chiefly  attempts  to  utilize  the  exist- 
ing machinery  of  the  Bureau  of  Immigration  and  the  Post  Office 
Department  for  receiving  the  applications  of  men  out  of  work,  col- 
lecting information  regarding  opportunities  for  employment,  and  as 
far  as  possible  referring  idle  men  to  opportunities  for  work.  For  this 
purpose  the  country  has  been  divided  into  18  zones,  with  a  central 
office  in  each,  which  is  in  charge  of  an  immigrant  inspector.  Appli- 
cations from  employers  and  employees  are  received  either  directly 
or  through  a  special  arrangement  with  the  Post  Office  Department. 

The  statutory  authority  for  the  establishment  of  the  system  is 
contained  in  the  act  of  1907,  creating  a  division  of  information  in 
the  Bureau  of  Immigration,  broadened  in  scope  by  the  act  creating 

38819°— 16 8 


114  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

the  Department  of  Labor.  The  opportunity  to  establish  the  system 
arose  through  the  great  decrease  in  immigration,  which  left  a  large 
part  of  the  resources  of  the  Bureau  of  Immigration  available  for 
this  purpose.  The  system  was  established  only  in  March,  1915,  and 
it  can  not  properly  be  judged  on  the  results  of  this  very  limited 
experience.  The  most  promising  feature  of  the  entire  system  is  the 
arrangement  which  has  been  made  for  close  cooperation  with  the 
National  Farm  Labor  Exchange,  which  has  been  organized  by  the 
labor  commissioners  of  the  States  in  the  wheat  belt.  No  such  close 
cooperation  has  yet  been  established  with  any  other  public  employ- 
ment system  and  no  effort  has  been  made  to  regulate  the  abuses  of 
the  private  exchanges  which  do  business  in  two  or  more  States. 

The  following  observations  regarding  the  present  scheme  of  the 
Department  of  Labor  seem  to  be  proper : 

(a)  The  system  of  zones  and  central  offices  is  sound  and  affords  a 
suitable  framework  for  the  development  of  the  system. 

( b )  The  operation  of  the  system  directly  by  the  Bureau  of  Immi- 
gration is  likely  to  deter  a  great  many  workmen  from  utilizing  it, 
through  a  belief  that  it  is  intended  only  for  immigrants. 

(c)  The  employers  have  generally  assumed  an  attitude  of  suspi- 
cion toward  the  Department  of  Labor,  which  forms  a  great  handicap. 

(d)  The  system  does  not  yet  provide  for  sufficiently  close  coopera- 
tion with  the  State  and  municipal  employment  offices. 

(e)  The  system  of  registering  applications  does  not  provide  for 
the  close  personal  contact  which  is  necessary  to  ascertain  the  require- 
ments of  the  employer  or  to  select  the  workman  who  is  capable  of 
filling  such  requirements.     The  success  of  every  employment  office 
depends  upon  this  personal  contact. 

(/)  The  qualifications  demanded  in  the  examination  of  immigrant 
inspectors  are  not  designed  to  secure  men  who  are  properly  qualified 
to  operate  public  employment  offices. 

(g)  A.  national  employment  .system  should  not  have  to  depend 
upon  the  exigencies  of  the  general  immigration  service. 

(h)  The  system  can  not  attain  efficiency  until  provision  is  made 
for  the  regulation  of  private  agencies  which  operate  in  two  or  more 
States. 

(*)  The  successful  operation  of  a  national  employment  system  can 
not  be  attained  until  provision  is  made  for  some  form  of  cheap  trans- 
portation, which  will  assure  the  prompt  arrival  of  workers  at  points 
where  they  are  needed  and  eliminate  the  present  wasteful,  dangerous, 
and  demoralizing  practice  of  workers  riding  on  freight  trains. 

(j)  In  order  to  secure  the  confidence  of  both  capital  and  labor,  the 
creation  of  national  and  local  advisory  committees  consisting  of 
employers  and  employees  is  advisable.  Such  committees  would  also 
be  of  great  assistance  through  their  knowledge  of  the  local  industrial 
conditions. 

It  is  suggested  that  the  commission  recommend : 

1.  The  enactment  of  appropriate  legislation  modifying  the  title 
of  the  Bureau  of  Immigration  to  "  Bureau  of  Immigration  and 
Employment "  and  providing  the  statutory  authority  and  appropri- 
ations necessary  for — 

(a)  The  establishment  of  a  national  employment  system,  under 
the  Department  of  Labor,  with  a  staff  of  well  paid  and  specially 
qualified  officials  in  the  main  offices  at  least. 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  115 

(b)  The  licensing,  regulation,  and  supervision  of  all  private  em- 
ployment agencies  doing  an  interstate  business. 

(c)  The  investigation  and  preparation  of  plans  for  the  regulariza- 
tion  of  employment,  the  decasualization  of  labor,  the  utilization  of 
public  work  to  fill  in  periods  of  business  depression,  insurance  against 
unemployment  in  such  trades  and  industries  as  may  seem  desirable, 
and  other  measures  designed  to  promote  regularity  and  steadiness  of 
employment. 

2.  The  immediate  creation  of  a  special  board  made  up  of  the  prop- 
erly qualified  officials  from  the  Departments  of  Agriculture,  Com- 
merce, Interior,  and  Labor  and  from  the  Board  of  Army  Engineers 
to  prepare  plans  for  performing  the  largest  possible  amount  of 
public  work  during  the  winter,  and  to  devise  a  program  for  the 
future  for  performing  during  periods  of  depression  such  public  work 
as  road  building,  construction  of  public  buildings,  reforestation,  irri- 
gation, and  drainage  of  swamps.  The  success  attending  the  construc- 
tion of  the  Panama  Canal  indicates  the  enormous  national  construc- 
tion works  which  might  be  done  to  the  advantage  of  the  entire 
Nation  during  such  periods  of  depression.  Similar  boards  or  com- 
missions should  be  established  in  the  various  States  and  munici- 
palities. 

XII.    ORGANIZATION,  METHODS,  AND  POLICIES  OF  TRADE  UNIONS. 

The  investigations  of  the  commission  conducted  under  the  direc- 
tion of  Dr.  George  E.  Barnett,  are  the  basis  of  the  following  conclu- 
sions : 

1.  The  number  of  trade  unionists  relative  to  the  working  popula- 
tion is  steadily  increasing,  although  in  certain  industries,  on  account 
of  the  opposition  of  the  great  corporations  and  hostile  employers' 
associations,  trade  unionism  is  practically  nonexistent.     At  present 
it  may  be  roughly  estimated  that  in  manufacturing,  mining,  trans- 
portation, and  the  building  industries,  if  the  proprietary,   super- 
visory, official,  and  clerical  classes  are  excluded,  25  per  cent  of  the 
workers  21  years  of  age  and  over  are  trade  unionists. 

2.  The  effects  of  trade  unionism  on  wages  are  undoubted.     With- 
out some  form  of  combination  the  wageworkers  can  not  bargain  on 
equal  terms  with  their  employers.    During  the  past  15  years,  a  period 
of  rapidly  rising  prices,  wages  in  well-organized  trades  have  kept 
pace  with  the  rising  cost  of  living,  in  contrast  to  the  relative  decline 
of  the  purchasing  power  of  the  wages  received  by  labor  generally. 

3.  In  the  well-organized  trades  the  hours  of  labor  have  been  stead- 
ily reduced  until  at  present  eight  hours  is  the  normal  working  day 
for  at  least  one-half  of  American  trade  unionists.     It  is  significant 
of  the  influence  of  trade  unionism  on  the  length  of  the  working  day 
that  it  is  exactly  in  those  trades  in  which  the  trade  unionists  are  a 
relatively  small  part  of  the  total  working  force  that  they  work  long 
hours  relatively  to  other  trade  unionists. 

4.  As  the  unit  of  industry  grows  larger  and  the  natural  relation 
which  exists  between  the  small  employer  and  his  workmen  disap- 
pears, the  opportunity  for  unjustifiable  discharges  and  petty  tyran* 
nies  enlarges.    The  result  is  distrust  and  enmity  among  the  employees. 
The  effective  remedy  is  the  organization  of  the  workers  and^  the 


116  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

establishment  of  a  system  of  trade  boards  in  which  the  workers  are 
equally  represented  with  power  to  deal  with  such  questions. 

5.  By  means  of  mutual  insurance  in  case  of  death,  sickness,  acci- 
dent, old  age,  and  unemployment  many  trade  unions  have  greatly 
improved  the  conditions  of  their  members.    The  extension  of  such 
systems  appears  to  be  highly  desirable. 

6.  The  trade  union  is  a  democratic  institution  and  faces  the  same 
problems  in  securing  efficient  government  that  other  democratic  insti- 
tutions face.     The  theory  of  government  which  the  American  trade 
unions  have  adopted  is  the  centralization  of  power  in  the  national 
trade  union  as  against  the  local  unions.    The  successful  carrying  out 
of  this  plan  of  organization  will  eliminate  the  chief  defects  in  trade 
union  government.    The  control  by  the  national  union  over  strikes 
and  the  system  of  mutual  insurance  is  already  thoroughly  established 
in  the  more  important  unions;  it  should  be  established  in  all  other 
unions. 

7.  Unwarranted  sympathetic  strikes  have  undoubtedly  been  the 
cause  of  great  annoyance  and  considerable  economic  loss  to  employers. 
The  annoyance  in  such  cases  is  particularly  great,  because  no  direct 
action  by  the  employer  can  be  taken;  at  best  he  can  only  use  his 
influence  with  his  associates  or  competitors.     With  the  increasing 
control  of  the  national  officers  over  the  local  unions,  this  kind  of 
strike  seems  to  be  decreasing  both  in  extent  and  frequency.     Such 
sympathetic  action  is  deep-rooted  in  the  sense  of  brotherhood  which 
to  a  greater  or  less  degree  pervades  and  will  not  be  completely 
eliminated  until  substantial  justice  exists  throughout  industry. 

8.  A  few  trade  unions  exclude  qualified  persons  from  membership 
by  high  initiation  fees  or  other  devices.    This  policy  is  condemned 
by  the  more  important  unions  and  is  prohibited  by  their  rules.    The 
evidence  presented  to  the  commission  shows  clearly  that  the  policy 
of  exclusion  is  antisocial  and  monopolistic  and  should  be  given  up  by 
those  unions  which  practice  it. 

9.  In  many  trades  the  efficiency  of  the  union  depends  upon  the 
maintenance  of  the  rule  that  all  those  working  at  the  trade  shall 
become  members  of  the  union.    Where  the  union  admits  all  qualified 
workers  to  membership,  under  reasonable  conditions,  such   a  rule 
can  not  become  the  basis  of  monopoly,  and  neither  the  rights  of  the 
individual  nor  the  public  interest  are  infringed  by  its  enforcement. 

10.  In  some  trades  there  are  a  considerable  number  of  union  rules 
which  restrict  the  productivity  of  the  worker.     Some  of  these  rules 
can  be  justified  on  the  ground  that  they  are  necessary  to  the  protec- 
tion of  the  health  of  the  worker.     There  are  some,  however,  which 
can  not  be  defended;  these  rules  are. antisocial  and  should  be  given 
up.    Experience  has  shown  that  where  industry  is  regulated  by  well- 
organized  systems  of  joint  agreements,  such  rules  either  disappear  or 
greatly  decrease  in  number  and  importance.     These  limitations  of 
output  should  not,  however,  be  considered  as  standing  alone.     The 
limitations  of  output  by  associations  of  employers  and  by  individual 
corporations   are   equally   antisocial   and   have   far  greater   conse- 
quence. 

11.  Jurisdictional  disputes  are  the  occasion  of  frequent  and  costly 
strikes.    The  disputes  of  this  character  which  have  caused  most  in- 
jury are  in  the  building  trades.     Up  to  the  present,  the  efforts  to 
lessen  these  disputes  by -action  of  the  national  unions  involved  have 


til 

: 

Df 


KEPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS.  117 

argely  failed.     It  is  suggested  that  the  commission  recommend  to 
the  American  Federation  of  Labor  and  to  the  national  unions  that 
newed  and  more  effective  eiforts  be  made  to  prevent  such  disputes. 
12.  The  essential  condition  for  trade-union  graft  is  the  placing  of 

rhe  authority  to  call  strikes  or  to  levy  boycotts  in  the  hands  of  one 
person  without  adequate  provision  for  supervision.  This  condition 
does  not  exist  in  many  unions.  There  is  abundant  evidence  to  show 
that  in  very  many  cases  it  originates  with  employers  who  desire  to 
secure  an  advantage  over  their  competitors.  The  reason  that  graft 
is  more  prevalent  in  the  building  trades  is  that  power  is  conferred  on 
the  business  agent  to  call  strikes  without  reference  either  to  the  rank 
and  file  or  to  the  national  officers.  It  has  been  testified  by  employers 
who  have  given  much  attention  to  this  problem  that  any  well-organ- 
ized association  of  employers  can  eliminate  graft  whenever  its  mem- 
bers desire  to  do  so.  As  far  as  the  unions  are  concerned  the  solution 
seems  to  lie  in  the  increased  participation  of  the  rank  and  file  in  the 
activities  of  the  organization  and  increased  provisions  for  fixing 
responsibility  upon  their  business  agents. 


• 


XIII.  ORGANIZATION,  METHODS,  AND  POLICIES  OF  EMPLOYERS' 

ASSOCIATIONS. 


1.  The  commission  finds  that  in  the  past  10  years  there  has  been  a 
rapid  growth  in  employers'  associations.    These  associations,  exclud- 
ing those  general  associations  which  have  been  formed  for  the  purpose 
of  advancing  the  political,  commercial,  or  legal  interests  of  the  em- 
ployers, may  be  divided  into  two  classes,  bargaining  associations  and 
hostile   associations.     The   bargaining   associations   deal   with   the 
unions ;  the  hostile  associations  oppose  collective  bargaining. 

2.  The  formation  of  bargaining  associations  is  essential  to  the 
existence  of  a  satisfactory  system  of  joint  agreements.    A  consider- 
able number  of  employers,  although  accepting  the  results  of  the 
joint  conferences  in  their  trades,  do  not  belong  to  the  associations  of 
employers.    It  is  highly  desirable  that  all  employers  whose  establish- 
ments are  run  in  accordance  with  the  terms  of  a  joint  agreement 
should  be  represented  in  making  that  agreement.    In  many  bargain- 
ing associations  the  control  over  the  members  is  very  weak.     The 
association  has  no  power  of  discipline  except  expulsion,  and  where 
participation  in  the  making  of  the  agreement  is  regarded  as  of  little 
importance  expulsion  is  an  inadequate  remedy. 

3.  The  hostile  employers'  association  is  a  comparatively  recent 
development.    In  many  cases  these  associations  were  formed  for  the 
purpose  of  negotiating  joint  agreements  with  the  unions,  but  after 
the  failure  of  negotiations  or  the  breakdown  of  an  agreement  they 
assumed  their  present  form.    In  some  cases  associations  which  have 
been  hostile  have  resumed  relations  with  the  unions.     There  is  a 
strong  tendency,  however,  for  a  hostile  association  after  a  few  years 
to  develop  principles  and  policies  which  make  any  agreement  with  the 
unions  impossible.    The  hostile  association  may  be  regarded,  there- 
fore, as  a  distinct  species  with  definitely  fixed  characteristics. 

t4.  In  the  majority  of  hostile  employers'  associations,  the  basic 
rinciple  is  that  the  conditions  of  employment  shall  be  determined 
^lely  by  the  individual  employer  and  the  individual  workman,  but 
i  actual  practice  this  results  uniformly  in  the  dictation  of  conditions 


118  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

solely  by  the  employer.  The  "  declarations  of  principles  "  adopted 
by  these  associations  declare,  for  example,  that  the  "number  of 
•apprentices,  helpers,  and  handy  men  to  be  employed  will  be  deter- 
mined solely  by  the  employer;"  "employees  will  be  paid  by  the 
hourly  rate,  by  premium  system,  by  piecework,  or  contract,  as  the 
employers  may  elect;"  "since  we,  as  employers,  are  responsible  for 
the  work  turned  out  by  our  workmen,  we  must  have  full  power  to 
designate  the  men  we  consider  competent  to  perform  the  work  and 
to  determine  the  conditions  under  which  that  work  will  be  prose- 
cuted." Even  as  to  wages  these  associations  are  unwilling  to  bargain 
collectively,  since  they  refuse  to  recognize  a  minimum  wage  or  any 
other  standard  form  of  wage,  without  which  a  collective  agreement 
is  impossible. 

5.  In  a  few  of  the  more  highly  centralized  employers'  associations 
wage  rates  are  set  by  the  association,  although  other  conditions  may 
be  left  to  the  individual  employer.    In  these  associations  the  principle 
of  individual  bargaining  is  modified  to  the  extent  that  certain  mini- 
mum conditions  of  employment  are  set  by  the  association. 

6.  The  prime  function  of  the  hostile  associations  is  to  aid  their 
members  in  opposing  the  introduction  of  collective  bargaining.    The 
most  important  device  used  by  the  members  of  the  associations  in 
resisting  the  attempts  of  the  union  to  replace  individual  bargaining 
by  joint  agreement  is  discrimination  against  members  of  the  union. 
Many  of  the  associations  have  in  their  "  declarations  of  principles  " 
the  statement  that  no  discrimination  will  be  made  against  any  man 
because  of  his  membership  in  any  organization,  but  this  rule  is  not 
enforced.     Ordinarily  members  of  the  union  are  not  discriminated 
against,  but  if  the  number  of  unionists  increases  in  any  shop  until  it 
becomes  large,  the  employer  is  advised  or  decides  on  his  own  volition 
to  hire  no  more  members  of  the  union.    Moreover,  any  workman  who 
is  prominent  in  urging  the  others  to  form  a  union  is  likely  to  be 
dismissed.    The  aim  of  the  association  is  to  prevent  in  ordinary  times 
such  an  increase  in  the  number  of  unionists  as  will  lead  to  a  collective 
demand.     The  proposition  is  effective  against  collective  action,  as 
membership  of  an  individual  workman  in  a  union  constitutes  no 
menace  to  the  employer's  power  to  control  his  business  unless  the 
individual  can  persuade  others  to  act  with  him. 

7.  Nearly  all  of  the  important  associations  maintain  employment 
agencies.     These  bureaus  enable  the  members  of  the  association  to 
select  nonunionists  for  employment. 

8.  Practically   all   of  the   associations   maintain   a   secret-service 
department  through  which  they  are  able  to  ascertain  the  increase 
in  the  number  of  the  trade  unionists  and  the  feeling  of  the  men. 
Through  this  information  the  association  is  able  to  forestall  threat- 
ened strikes  and  any  other  attempt  to  secure  collective  action  on  the 
part  of  the  workers. 

9.  In  some  of  the  associations  an  attempt  is  made  to  induce  the 
individual  employer  to  change  conditions  when  there  is  evidence 
that  dissatisfaction  exists  among  his  workmen.     Similarly  some  of 
the  associations  have  been  active  in  promoting  safety  systems  and 
welfare  systems. 

10.  Inasmuch  as  the  right  of  workers  to  organize  in  any  manner 
that  they  see  fit  is  fully  recognized  by  society  and  has  repeatedly 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  119 

been  given  a  legal  status  in  the  decisions  of  even  the.  most  conserva- 
tive courts,  there  is  strong  reason  for  holding  that  these  hostile 
employers'  associations,  which  are  organized  primarily  for  the  pre- 
vention of  organization,  are  not  only  antisocial  but  even  perhaps 
illegal. 

It  is  suggested  that  the  commission  strongly  recommend: 
1.  The  formation  of  strong  and  stable  associations  of  employers 
for  the  purpose  of  negotiating  joint  agreements  and  otherwise  deter- 
mining, upon  a  democratic  and  equitable  basis,  the  fundamental 
problems  of  the  trade. 

XIV.  JOINT  AGREEMENTS. 

The  investigations  of  the  commission,  conducted  under  the  direc- 
tion of  Dr.  George  E.  Barnett,  as  well  as  the  evidence  presented  at 
the  public  hearings,  warrant  the  following  conclusions: 

1.  The  conditions  of  employment  can  be  most  satisfactorily  fixed 
by  joint  agreements  between  associations  of  employers  and  trade 
unions. 

2.  Where  the  association  of  employers  and  the  union  participating 
in   the   joint   agreement  cover  the   entire  competitive   district,   it 
becomes  possible  to  regulate  the  trade  or  the  industry,  not  merely 
with  reference  to  wages  and  hours,  but  with  reference  to  unemploy- 
ment, the  recruiting  of  the  trade,  and  the  introduction  of  machinery 
and  new  processes.     The  method  of  regulation  by  joint  agreement 
is  superior  to  the  method  of  legislative  enactment,  since  it  is  more 
comprehensive,  is  more  elastic,  and  more  nearly  achieves  the  ideal 
of  fundamental  democracy  that  government  should  to  the  greatest 
possible  extent  consist  of  agreements  and  understandings  voluntarily 
made.    The  method  of  legislative  enactment  is  inapplicable  to  many 
trade  problems,  and  even  where  it  is  supplemented  by  administra- 
tive regulation  it  is  cumbersome. 

3.  The  essential  element  in  a  system  of  joint  agreements  is  that 
all  action  shall  be  preceded  by  discussion  and  deliberation.    If  either 
party  through  lack  of  organization  is  unable  to  participate  effectively 
in  the  discussion  and  deliberation,  to  that  extent  the  system  falls 
short  of  the  ideal.     Where  a  union  or  an  employers'  association 
delivers  its  demands  in  the  form  of  an  ultimatum  and  denies  the  other 
party  an  opportunity  collectively  to  discuss  the  demands,  a  funda- 
mental condition  of  the  joint  agreement  is  lacking. 

4.  The  thorough  and  effective  organization  of  the  employers  is 
lacking  in  many  trades  in  which  the  workmen  are  well  organized. 
It  is  highly  desirable  that  such  organization  should  be  brought  about. 

5.  In  a  few  trades  agreements  have  been  made  which  provide  that 
the  members  of  the  union  will  not  be  allowed  to  work  for  any  em- 
ployers who  are  not  members  of  the  employers'  association.     The 
usual  result  is  that  the  employers'  association  restricts  its  member- 
ship or  in  some  other  manner  artificially  raises  prices  to  the  con- 
sumer.    Such  agreements  are  against  the  public  interest  and  should 
not  be  tolerated. 

6.  Joint  agreements,  on  the  whole,  are  well  kept.     There  is  a  con- 
stant increase  in  the  sense  of  moral  obligation  on  the  part  of  both 
employers  and  unions.     Violations  of  agreements  on  the  part  of  a 


120  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

small  number  of  men  or  of  a  single  employer  occasionally  occur.  It 
is  found  that  the  unions  tend  more  and  more  to  punish  by  fines  or 
other  disciplinary  measure  such  infraction  on  the  part  of  their  mem- 
bers. The  great  difficulty  in  the  rapid  solution  of  this  problem  is 
that  even  graver  evils  than  contract  breaking  are  apt  to  result  from 
giving  officials  the  power  which  they  must  have  in  order  to  punish 
properly  individuals  or  local  unions  for  illegal  strikes.  The  em- 
ployers' associations,  from  the  nature  of  the  case,  have  less  power 
over  their  members,  but  in  practically  all  cases  they  exercise  in  good 
faith  what  power  they  have.  Furthermore,  since  the  employer  in 
the  first  instance  has  the  power  to  interpret  the  contract,  which  he 
may  do  unjustly,  he  may  actually  be  guilty  of  the  breach  of  contract 
when  the  employees  who  strike  against  such  unjust  interpretation 
are  apparently  the  guilty  parties. 

7.  In  certain  agreements  a  specified  money  guaranty  is  made  by 
each  party,  and  in  any  breach  of  the  agreement  the  guaranty  is  for- 
feited to  the  other  side.     On  the  whole,  such  guaranties  do  not  serve 
a  desirable  purpose,  since  there  is  danger  that  the  parties  may  come 
to  regard  the  forfeiture  of  the  guaranty  as  a  compensation  for  the 
breach  of  the  agreement.1     The  sense  of  moral  obligation  is  thus 
seriously  impaired. 

8.  It  does  not  seem,  nor  has  it  been  urged  by  any  careful  student 
of  the  problem,  whether  employer  or  worker,  that  any  good  end 
would  be  served  by  giving  legal  validity  to  joint  agreements.     The 
agreements  are  formulated  by  parties  acting  without  legal  advice, 
and  it  not  infrequently  happens  that  the  form  of  words  adopted  is 
capable  of  several  constructions.     In  some  cases  the  language  is  in- 
tentionally general,  though  its  purpose  may  be  fully  understood  by 
the  different  parties.     It  is  not  desirable  that  such  agreements,  the 
only  ones  possible  under  the  circumstances,  should  be  construed  by 
the  rigid  rules  customarily  used  in  the  courts. 

9.  Every  joint  agreement  should  contain  a  clause  providing  for 
arbitration  in  the  event  that  the  interpretation  of  the  agreement  is 
in  dispute.    Under  such  provision  the  arbitrator  would  approach 
the  question  unhampered  by  strict  rules  of  construction.     The  re- 
sponsibility for  breaking  an  agreement  would  under  such  a  plan  be 
definitely  located. 

It  is  suggested  that  the  commission  recommend : 

1.  The  extension  of  joint  agreements  as  regards  not  only  the  field 
of  industry  which  they  cover  and  the  class  of  labor  included  but  the 
subjects  which  are  taken  up  for  negotiation  and  settlement.  Greater 
responsibility  for  the  character,  skill,  and  conduct  of  their  members 
should  accompany  the  greater  participation  of  trade-unions  in  the 
governing  of  industry. 

XV.  AGENCIES  OF  MEDIATION,  INVESTIGATION,  AND  ARBITRATION. 

The  result  of  the  very  extensive  investigations  which  have  been 
made  regarding  the  agencies  for  mediation  and  arbitration  in  this 
country  and  abroad  have  been  embodied  in  the  plan  for  legislation, 
which  is  attached  hereto.  The  plan  as  presented  is  limited  to  a 
national  system,  but  it  is  recommended  that  the  State  legislatures 

1  This  statement  is  not  in  accordance  with  the  finding  of  Dr.  Barnett,  but  is  formed 
after  consideration  of  the  evidence  and  opinion  of  the  British  Industrial  Council. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS.  121 


• 


should  enact  legislation  along  the  same  general  lines.     The  general 
principles  which  have  governed  in  drawing  up  this  plan  may  be 
tated  as  follows: 

1.  The  Mediation  Commission  should  be  independent  of  and  defi- 
nitely divorced  from  every  other  department  of  the  State  or  Federal 
Government.    Its  only  power  grows  out  of  its  impartiality,  and  this 
can  not  be  secured  if  it  is  subordinate  to  any  other  body  whose 
sympathies  either  with  labor  or  with  capital  can  be  questioned. 

2.  Mediation  should  be  entrusted  to  a  person  as  far  as  possible 
distinct  from  those  who  act  as  arbitrators  or  appoint  arbitrators. 

3.  The  office  of  mediator  should  be  placed  beyond  the  suspicion 
that  the  office  is  being  used  as  a  reward  for  party  services. 

4.  The  mediator  should  appoint  his  own  subordinates, 

5.  It  is  desirable  in  the  event  of  the  failure  of  mediation  by  an 
official  mediator  that  the  parties  should  be  asked  to  consent  to  the 
appointment  of  a  board  of  mediation  and  investigation  consisting 
of  three  persons,  one  selected  by  each  party  and  the  third  by  these 
(wo.     Such  a  board,  it  appears,  would  be  able  to  secure  an  agree- 
ment in  many  cases  where  the  mediator  fails.    These  boards  should 
have  power  to  summon  witnesses  and  compel  the  production  of 
papers.    In  the  event  that  the  board  could  not  secure  an  agreement 
during  the  investigation,  it  should  be  empowered  to  make  a  public 
report  stating  the  terms  on  which,  in  its  judgment,  the  parties  should 
settle. 

6.  In  those  cases  in  which  the  parties  are  unable  to  agree  on  the 
third  member  of  the  board  of  mediation  and  investigation,  he  should 
be  appointed  in  the  State  systems  by  the  State  board  of  arbitration, 
and  in  the  national  system  by  the  mediators,  from  a  list  prepared 
in  advance  by  an  advisory  board  consisting  of  10  representatives  of 
employers'  associations  and  10  representatives  of  trade  unions. 

7.  National  boards  of  mediation  and  investigation  are  to  be  formed 
nly  in  disputes  involving  interstate  commerce  and  in  those  cases 

in  which  the  legislature  or  the  executive  of  a  State  has  requested 
the  intervention  of  the  Federal  Government. 

8.  The  Secretary  of  Labor,  or  in  the  States  the  official  bureau  or 
commission,  which  is  created   for  the  protection   of  the  workers, 
should  be  employed  to  appear  before  the  board  of  mediation  and 
investigation,  when  it  is  holding  public  hearings,  either  at  the  request 
of  the  board  as  amicus  curiae  in  the  ascertainment  of  facts  regard- 
ing labor  conditions,  or,  if  appealed  to,  as  the  spokesman  for  the 
employees  in  the  presentation  of  their  case. 

PROPOSED  PLAN  OF  A  NATIONAL  SYSTEM  OF  MEDIATION,  INVESTIGATION, 

AND  ARBITRATION. 

ORGANIZATION. 

1.  Scope  of  authority. — The  National  Mediation  Commission 
should  be  given  exclusive  authority  to  intervene,  under  the  conditions 
hereinafter  defined,  in  all  industrial  disputes  involving  any  corpora- 
tion, firm,  or  establishment,  except  public  service  establishments, 
which  is  engaged  in  interstate  commerce  or  whose  products  enter  into 
interstate  or  foreign  commerce. 


122  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

This  provision  differentiates  its  functions  from  those  of  the  media- 
tion commission  existing  at  present  under  the  Newlands  Act.  It  is 
considered  desirable  for  the  present  to  provide  for  the  existence  of 
the  two  commissions,  at  least  until  the  proposed  commission  has  been 
thoroughly  tested.  It  is  believed  to  be  wise,  however,  to  provide  for 
their  close  cooperation  from  the  very  beginning,  with  the  idea  that 
they  will  ultimately  be  consolidated. 

It  will  be  noted  that  this  provision  also  will  have  the  effect  of  sup- 
planting the  mediation  powers  which  are  now  vested  in  the  Depart- 
ment of  Labor.  There  is  no  desire  to  criticise  or  belittle  the  past 
activities  of  the  mediators  operating  under  the  Department  of  Labor, 
for  such  criticism  is  absolutely  unwarranted.  It  is  also  freely-  ad- 
mitted that  the  Department  of  Labor  has  not  had  either  the  time  or 
the  resources  necessary  for  the  proper  development  of  .this  function. 
The  proposal  is  made,  however,  primarily  upon  three  grounds  which 
seem  to  be  sound  and,  in  fact,  compelling:  First,  the  function  of 
mediation  depends  absolutely  upon  the  permanent  assurance  of  im- 
partiality. The  Department  of  Labor  was  created  to  represent  the 
interests  of  labor,  and  it  seems  not  only  inevitable  but  desirable  and 
proper  that  the  Secretary  of  Labor  should  always  be  drawn  from  the 
ranks  of  organized  labor.  The  function  of  mediation  may  be  admin- 
istered with  absolute  impartiality  under  any  particular  Secretary, 
or  even  under  every  Secretary,  and  yet  it  seems  impossible,  even 
under  such  conditions,  to  create  that  absolute  assurance  of  impar- 
tiality which  is  the  prime  essential.  Second,  it  is  the  prerogative  and 
duty  of  the  Department  of  Labor  to  act,  aggressively  if  need  be,  for 
the  protection  of  the  workers  at  all  times,  and  to  utilize  every  resource 
at  its  command  to  giye  them  that  protection.  The  Department  must 
necessarily  be  greatly  impeded  in  such  frankly  partisan  action,  it 
would  seem,  if  it  must  at  the  same  time  preserve  either  the  substance 
or  the  shadow  of  impartiality  in  carrying  out  its  function  of  media- 
tion. Third,  in  the  bitterest  disputes,  where  the  public  interest 
most  strongly  demands  intervention,  mediation  is  seldom  successful, 
and  a  stage  is  quickly  reached  where  the  most  vital  necessity  is  for 
the  full  and  exact  facts  regarding  the  dispute,  in  order  that  public 
opinion  may  be  intelligently  formed  and  directed.  Experience  has 
shown  that  such  facts  can  best  be  secured  fully,  quickly,  and  effec- 
tively through  the  medium  of  public  inquiry.  This  means  that  the 
inquiring  body  must  have  power  to  summon  witnesses,  compel  the 
production  of  books  and  papers,  and  compel  testimony,  or  the  pro- 
ceeding is  worse  than  a  farce.  It  may  be  regarded  as  certain  that 
such  powers  will  never  be  entrusted  to  the  Department  of  Labor. 

2.  Membership. — The    members    of    the    Mediation    Commission 
should  be  appointed  by  the  President,  with  the  advice  and  consent 
of  the  Senate.    The  members  should  represent  in  proper  balance  the 
interests  of  employers,  employees,  and  the  public.     The  members 
should  serve  for  terms  of  six  years. 

3.  Advisory  board. — The  President  of  the  United  States  should 
designate  an  equal  number  of  leading  organizations  of  employers 
and  leading  organizations  of  employees  to  appoint  representatives 
to  act  as  an  advisory  body  to  the  President,  to  Congress,  and  to  the 
Mediation  Commission.     This  body,  designated  hereinafter  the  ad- 
visory board,  should  give  advice  regarding  the  duties  of  the  commis- 
sion, the  administration  of  its  affairs  and  the  selection  of  mediators, 


REPORT  OP   COMMISSION   ON  INDUSTRIAL  RELATIONS.  123 

and  be  empowered  to  make  recommendations  regarding  legislation. 
The  advisory  board  should  also  prepare  lists  of  persons  who  may  be 
called  upon  to  serve  on  boards  of  arbitration  and  on  boards  of  media- 
tion and  investigation.  The  advisory  board  should  be  called  together 
at  least  once  a  year  by  the  chairman  of  the  Mediation  Commission; 
it  should  have  an  organization  independent  of  the  commission  and 
elect  its  own  chairman  and  secretary. 

The  members  of  the  advisory  board  should  be  paid  traveling  and 
other  necessary  expenses  and  such  compensation  as  may  be  determined 
upon.  Provision  should  be  made  for  the  removal  of  members  by  the 
organizations  which  they  represent. 

4.  Subordinate  officers  and  assistants. — The  Mediation  Commission 
should  have  power  to  appoint,  remove  at  pleasure,  and  fix  the  com- 
pensation of  a  secretary  (and  a  limited  number  of  clerks).  The 
appointment  of  other  officers  and  assistants,  such  as  mediators,  exam- 
iners, investigators,  technical  assessors,  experts,  disbursing  officer, 
clerks,  and  other  employees,  should  be  subject  to  the  civil-service 
rules.  But  arrangements  should  be  made  to  have  the  examination 
include  experience  and  other  proper  qualifications,  and  to  give  the 
Mediation  Commission  power  to  examine  all  candidates  orally. 


POWERS,   DUTIES   AND    JURISDICTION. 


5.  In  interstate  commerce. —  (a)  Mediation:  Whenever  a  contro- 
versy concerning  conditions  of  employment  arises  between  employer 
and  employees  engaged  in  interstate  commerce  .other  than  public 
service  corporations,  either  party  should  be  able  to  apply  to  the 
chairman  of  the  Mediation  Commission  for  its  services  in  the  bring- 
ing about  of  an  amicable  adjustment  of  the  controversy.  Or,  the 
chairman  of  the  commission  should  be  authorized  to  offer,  on  his  own 
initiative,  the  services  of  the  mediators  of  the  commission.  If  efforts 
to  bring  about  an  amicable  adjustment  through  mediation  should  be 
unsuccessful,  the  commission  should  at  once,  if  possible,  induce  the 
parties  to  submit  their  differences  to  arbitration. 

(b)  Arbitration:  Procedure  should   be   similar  to   that   outlined 
in  the  Newlands  Act.    If  it  is  necessary  for  the  Mediation  Commis- 
sion to  appoint  arbitrators,  they  should  Ibe  taken  from  a  list  prepared 
by  the  advisory  board. 

(c)  Boards  of  mediation  and  investigation:  If  the  parties  to  the 
controversy  can  not  be  induced  to  arbitrate,  and  if  the  controversy 
should  threaten  to  interrupt  the  business  of  employers  and  employees 
to  the  detriment  of  the  public  interest,  the  commission  should  be 
authorized  to  request  the  two  parties  to  consent  to  the  creation  of  a 
board  of  mediation  and  investigation.    If  the  consent  of  the  parties 
to  the  controversy  is  secured,  the  commission  shall  form  such  a  board. 
Of  the  three  members  of  the  board,  one  should  be  selected  by  the 
employers,  one  by  the  employees  and  a  third  on  the  recommendation 
of  the  members  so  chosen.    If  either  side  fails  to  recommend  a  mem- 
ber, he  should  be  appointed  by  the  commission.     If  after  a  stated 
time  the  third  member  is  not  recommended,  the  commission  should 
select  him.    Appointments  to  boards  of  mediation  arid  investigation 
shall  be  made  by  the  commission  from  a  list  prepared  for  fills  pur- 
pose by  the  advisory  board.    The  board  of  mediation  and  investiga- 
tion should  offer  its  friendly  offices  in  bringing  about  a  settlement  of 


124  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

the  dispute  through  mediation.  If  mediation  should  not  be  success- 
ful and  if  the  parties  to  the  controversy  refuse  to  arbitrate,  this 
board  should  have  power  to  make  an  investigation  of  the  contro- 
versy, and  should  be  required  to  submit  to  the  commission  a  full 
report  thereon,  including  recommendations  for  its  settlement.  The 
commission  should  be  empowered  to  give  this  report  and  recommen- 
dations adequate  publicity. 

(d)  Powers  to  secure  evidence:  A  board  of  mediation  and  inves- 
tigation should  have  power  to  administer  oaths,  to  subpoena  and 
compel  the  attendance  and  testimony  of  witnesses  and  the  produc- 
tion of  books,  papers,  documents,  etc.,  and  to  conduct  hearings  and 
investigations,  and  to  exercise  such  other  similar  powers  as  might  be 
necessary.  It  should  not  have  power  to  prohibit  or  to  impose  pen- 
alties for  strikes  or  lockouts. 

6.  Not  in  interstate  commerce. — It  should  be  provided  that  the 
commission,  or  a  board  of  mediation  and  investigation  created  by  it, 
may  exercise  the  foregoing  powers  except  the  compulsory  powers 
under  subdivision  "  d "  of  proposal  5,  for  settling  industrial  con- 
troversies between  parties  not  engaged  in  interstate  commerce,  if 
they  are  requested  to  do  so  by  the  governor  or  legislature  of  a  State, 
or  by   the  mayor,  council,  or  commission  of  a  municipality. 

7.  The  Secretary  of  Labor  and  the  Secretary  of  Commerce  should 
be  authorized  to  bring  to  the  attention  of  the  commission  any  dispute 
in  which  the  intervention  of  the  commission  seems  desirable.     The 
Secretary  of  Labor,  or  such  officer  as  he  may  designate,  should  also 
be  authorized  to  appear  before  any  board  of  mediation  and  investi- 
gation, either  at  the  request  of  the  board  as  amicus  curiae  for  the 
ascertainment  of  facts  regarding  labor  conditions,  or,  if  appealed  to, 
as  a  spokesman  for  the  employees  in  the  presentation  of  their  case. 

COOPERATION. 

8.  Cooperation  with  State  and  local  authorities. — The  commission 
should  be  authorized  and  directed  to  cooperate  with  State,  local  and 
territorial  authorities  and  similar  departments  of  foreign  countries 
which  deal  with  the  adjustment  of  industrial  disputes. 

9.  Cooperation   with    other   Federal    agencies. — The    commission 
should,  as  far  as  practicable,  coordinate  its  activities  and  cooperate 
with  other  Federal  departments  in  the  performance  of  their  duties. 

XVI.  INDUSTRIAL  CONDITIONS  AND  THE  PUBLIC  HEALTH — SICKNESS 

INSURANCE. 

The  investigations  which  have  been  conducted  by  the  commission 
under  the  direction  of  Dr.  B.  S.  Warren,  of  the  Public  Health 
Service,  are  the  basis  for  the  following  conclusions : 

1.  Each  of  the  thirty-odd  million  wage  earners  in  the  United 
States  loses  an  average  of  nine  days  a  year  through  sickness.     At 
an  average  of  $2  per  day,  the  wage  loss  from  this  source  is  over 
$500,000,000.  .At  the  average  cost  of  ircdical  expenses  ($6  per  capita 
per  year)  there  is  added  to  this  at  the  very  least  $180,000,000. 

2.  Much  attention  is  now  given  to  accident  prevention,  yet  acci- 
dents cause  only  one-seventh  as  much  destitution  as  does  sickness 
and  one-fifteenth  as  much  as  does  unemployment.    A  great  deal  of 
unemployment  is  directly  due  to  sickness,  and  sickness,  in  turn,  fol- 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  125 


Ivvs   unemployment.     The   commission's  recent   study  in   Indiana 
owed  that  17.9  per  cent  of  unemployment  among  women  in  stores 
that  State  was  due  to  illness.     In  1901,  a  Federal  investigation 
25,440  workmen's  families  showed  that  11.2  per  cent  of  heads  of 
milies  were  idle  during  the  year  on  account  of  sickness,  and  that 
the  average  period  of  such  unemployment  was  7.71  weeks.     Other 
investigations  show  that  30  to  40  per  cent  of  cases  requiring  charit- 
able relief  are  immediately  due  to  sickness. 

3.  Sickness  among  wage  earners  is  primarily  the  direct  result  of 
poverty,  which  manifests  itself  in  insufficient  diet,  bad  housing, 
inadequate  clothing,  and  generally  unfavorable  surroundings  in  the 
home.     The  surroundings  at  the  place  of  work  and  the  personal 
habits  of  the  worker  are  important  but  secondary  factors. 

4.  There  are  three  general  groups  of  disease-causing  conditions: 
(1)   Those  for  which  the  employer  and  character  of  the  industry 
and   occupation   are  responsible;    (2)    those  for  which  the  public, 

rough  regulatory  and  relief  agencies,  is  responsible;  and  (3)  those 
r  which  the  individual  worker  and  his  family  are  responsible. 

5.  The  employers'  responsibility  includes,  besides  conditions  caus- 
ig  so-called  occupational  diseases,  low  wages,  excessive  hours,  meth- 
ds  causing  nervous  strain,  and  general  insanitary  conditions.    Many 

employers  already  partly  recognize  their  responsibility;  aside  from 
"  welfare  work,"  many  contribute  liberally  to  employees'  sick  bene- 
fit funds  or  provide  for  the  entire  amount. 

6.  The  public  has  in  part  recognized  its  responsibility  in  such  mat- 
ters as  housing,  water  supply,  foods,  drugs,  and  sanitation.    But  the 
recognition  of  responsibility  has  not  been  thoroughgoing,  and  in 
the  case  of  local  health  officers  the  tendency  has  been  too  frequently 
to  provide  for  the  better  residential  sections  and  neglect  the  slums. 

7.  The  greatest  share  of  responsibility  rests  upon  the  individual, 
and  under  present  conditions  he  is  unable  to  meet  it.    This  inability 
exists  by  reason  of  the  fact  that  the  majority  of  wage  earners  do  not 
receive  sufficient  wages  to  provide  for  proper  living  conditions,  and 
because  the  present  methods  of  disease  prevention  and  cure  are  ex- 
pensive and  sickness  is  most  prevalent  among  those  who  are  least 
able  to  purchase  health.     The  worker  is  expected  to  provide  for 
almost  certain  contingencies  in  the  future  when  he  lacks  means  of 
existing  adequately  in  the  present. 

8.  If  we  might  reasonably  expect  a  rapid  increase  in  the  wages  of 
all  classes  of  workers  to  a  standard  which  would  permit  proper  living 
conditions  and  adequate  medical  attention,  it  would  perhaps  be  inad- 
visable to  recommend  any  governmental  action.     But  we  feel  as- 
sured that  no  such  condition  is  to  be  expected  in  the  near  future  and 
believe  that  new  methods  of  dealing  with  the  existing  evils  must 
be  adopted. 

9.  The  remedial  measures  for  existing  conditions  must  be  based  on 
the  cooperative  action  of  those  responsible  for  conditions;  must  be 
democratic  in  maintenance,  control,  and  administration;  must  dis- 
tribute costs  practicably  and  justly;  and  must  provide  a  powerful 
incentive  for  sickness  prevention. 

10.  A  system  of  sickness  insurance  is  the  most  feasible  single  meas- 
ure.    This  conclusion  is  based  on  the  following: 

(a)  The  losses   occasioned  by  the   wage   earner's  sickness  affect 
employee,  employer,  and  community,  all  of  whom  share  in  the  re- 


126  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

sponsibility.     Insurance  is  the  recognized   method   of   distributing 
loss  so  as  to  reduce  individual  risk  to  a  minimum. 

(b)  The  strongest  of  incentives — that  of  lessening  cost — is  given 
to  efforts  to  diminish  frequency  and  seriousness  of  losses;  sickness 
insurance  in  this  respect  is  a  preventive  measure  of  a  positive  and 
direct  kind.     The  lower  the  morbidity  and  mortality  rates,  the  less 
the  amount  necessary  for  benefits  and  the  lower  the  insurance  rate. 

(c)  Sickness  insurance  is  no  longer  experimental,  but  is  rapidly 
becoming  universal.     It  is  not  a  novelty  even  in  the  United  States. 
Although  not  provided  for  nor  subsidized  by  Government  here,  it  is 
most  widely  used,  there  being  several  million  workers  so  insured. 

(d)  The  cost  would  be  no  greater  than  at  present.     The  conclusion 
appears  sound  that  medical  benefits  and  minimum  cash  benefits  of 
$7  per  week  for  a  period  not  exceeding  26  weeks  in  one  year,  and 
death  benefits  of  $200,  can  be  provided  at  a  total  cost  of  50  cents 
per  week  per  insured  person.     Budgetary  studies  of  large  numbers 
of  workingmen's  families  show  that  under  present  conditions  from 
25  and  50  cents  a  week  up  to  TO  cents  and  even  $1.86  is  spent  for 
little  more  than  burial  insurance.     Workers  would  thus  receive  im- 
measurably greater  benefits  for  much  less  than  they  now  pay. 

11.  A  governmental  system   of  sickness  insurance  is  preferable 
because — 

(a)  More  democratic;  the  benefits  would  be  regarded  as  rights, 
not  charity. 

(b)  Compulsory    features,    obnoxious    under    private    insurance, 
would  be  no  longer  objectionable. 

(c)  On  account  of  the  reduction  in  overhead  charges  and  dupli- 
cation, higher  efficiency  in  administration  would  be  secured  at  less 
cost. 

(d)  Cooperation  with  other  public  agencies  is  impracticable  other- 
wise. 

(e)  European  experience  has  proved  the  superiority  of  Govern- 
ment systems  to  private  insurance. 

(/)  Taxation  of  industry  by  Federal  Government  in  sickness- 
insurance  system  is  thoroughly  established  by  the  Marine- Hospital 
Service.  Law  taxing  vessels  for  such  fund  was  passed  in  1798,  and 
its  constitutionality  has  never  been  questioned. 

12.  The  conclusion  seems  warranted  that  a  sickness-insurance  sys- 
tem for  the  United  States  or  the  several  States  similar  in  general 
principles  and  methods  to  the  best  European  systems  will  be  less  diffi- 
cult and  radical  than  has  been  foreboded.     It  will  not  so  much  intro- 
duce new  ideas  and  practices  as  it  will  organize  existing  plans  and 
principles  into  more  effective  accomplishment.     Existing  agencies, 
in.  trade-unions,  mutual  benefit  societies,  and  establishment  funds, 
can  be  utilized  just  as  they  have  been  in  Europe.     The  real  problem 
becomes  one  of  constructive  organization. 

It  is  suggested  that  the  commission  recommend  a  Federal  system 
of  sickness  insurance,  constructed  along  the  lines  here  briefly  sum- 
marized. 

1.  Membership. — The  membership  shall  comprise  all  employees  of 
persons,  firms,  companies,  and  corporations  engaged  in  interstate 
commerce,  or  whose  products  are  transported  in  interstate  commerce, 
or  which  may  do  business  in  two  or  more  States.  The  employees  of 
intrastate  establishments  to  be  permitted  to  be  insured,  if  they  so 
elect,  under  regulations  to  be  prescribed  by  the  commission. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  127 


2.  Fund. — The  fund  is  to  be  created  by  joint  contributions  by 
employees,  employers,  and  the  Government,  the  last  named  sufficient 
for  expenses  of  administration.    Such  contributions  should  probably 
be  in  the  proportion  of  50  per  cent  from  workers,  40  per  cent  from 
employers,  and  10  per  cent  from  the  Government.     Individuals  or 
groups  desiring  larger  benefits  may  arrange  to  make  larger  pay- 
ments, and  the  rate  in  any  trade,  industry,  or  locality  may  be  reduced 
where  conditions  so  improve  as  to  make  a  lower  rate  adequate.    The 
contributions  are  to  be  secured  through  taxing  each  interstate  em- 
ployer a  certain  amount  weekly  for  each  employee,  the  part  con- 
tributed by  workers  to  be  deducted  from  their  wages,  thus  using  the 
regular  revenue  machinery  of  the  Government. 

3.  Benefits. — Benefits  to  be  available  for  a  limited  period  in  the 
form  of  cash  and  medical  benefits  during  sickness,  nonindustrial 
accidents,  and  child  bearing ;  death  benefits  to  be  of  limited  size  and 

ayable  on  presentation  of  proper  evidence. 

4.  Administration. — The  administration  of  the  insurance  funds  is 
be  carried  out  by  a  national  sickness  insurance  commission.    The 

_ational  commission  should  be  composed,  by  presidential  appoint- 
ment with  Senate  confirmation,  of  a  director  (who  would  be  chair- 
man), representatives  of  employers  and  representatives  of  employees 
in  equal  ratio,  and,  as  ex  officio  nonvoting  members,  tlie  Federal 
Commissioner  of  Labor  Statistics  and  the  Surgeon  General  of  the 
Public  Health  Service.  The  commission  should  be  empowered  to 
supervise  all  funds  and  determine  their  character  and  limits  of 
jurisdiction ;  promulgate  all  regulations  necessary  to  enforce  the  act ; 
establish  and  maintain  hospitals;  maintain  staffs  of  medical  exam- 
iners, specialists,  dentists,  and  visiting  nurses ;  provide  for  medicines 
and  appliances;  make  contracts  with  local  physicians;  cooperate 
with  local  funds  and  health  authorities  in  disease  prevention;  and 
provide  for  collecting  actuarial  data. 

Correlation  of  the  insurance  system  with  the  medical  profession, 
the  lack  of  which  has  been  a-  serious  defect  in  German  and  British 
systems,  is  absolutely  necessary.  Contracts  with  physicians  should 
allow  to  each  a  per  capita  payment  for  the  insured  persons  under  his 
care,  the  right  of  selection  of  physician  to  be  retained  by  the  insured. 
For  the  signing  of  certificates  entitling  the  insured  to  benefits,  and 
for  treating  the  insured  in  hospitals,  the  Surgeon  General  should 
detail  physicians  from  the  Public  Health  Service,  their  entire  time 
to  be  given  to  these  and  other  duties  (consulting  with  local  physi- 
cians, enforcing  Federal  laws  and  regulations,  and  cooperating  with 
local  authorities). 


XVII.    EDUCATION  IN  RELATION  TO  INDUSTRY. 

The  report  dealing  with  this  question  has  been  presented  by  Com- 
missioner Lennon,  and  is  printed  on  pages  253-261. 

XVIII.     SCIENTIFIC  MANAGEMENT. 


The  investigation  of  scientific  management  was  conducted  by 
Prof.  Robert  F.  Hoxie,  with  the  expert  assistance  and  advice  of  Mr. 
Robert  G.  Valentine,  representing  the  employer's  interest  in  manage- 
ment, and  Mr.  John  P.  Frey,  representing  the  interests  of  labor.  The 
investigation  grew  out  of  public  hearings  held  by  the  commission 


128  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

during  the  spring  of  1914,  at  which  the  almost  unqualified  opposition 
of  labor  to  scientific  management  was  manifested.  The  purpose  of 
the  investigation  was  to  test  by  the  results  of  actual  practice  the 
claims  of  scientific  management  and  the  charges  of  the  representatives 
of  organized  labor. 

The  investigation,  which  covered  a  period  of  more  than  a  year, 
was  made  with  the  greatest  care  and  thoroughness.  Thirty-five 
shops  and  systematizing  concerns  were  examined  and  interviews 
were  had  with  a  large  number  of  scientific  management  leaders, 
experts,  and  employers.  The  shops  visited  w^ere,  almost  without 
exception,  those  designated  by  authorities  on  scientific  management, 
such  as  Messrs.  Taylor,  Gantt,  and  Emerson,  as  the  best  representa- 
tives of  the  actual  results  of  scientific  management.  In  other  words, 
the  examination  was  practically  confined  to  the  very  best  examples 
of  scientific  management.  The  defects  and  shortcomings  pointed  out 
hereinafter  are,  therefore,  characteristic  of  the  system  under  the  most 
favorable  conditions. 

As  a  result  of  their  investigations,  Prof.  Hoxie,  Mr.  Valentine,  and 
Mr.  Frey  submitted  a  report,  agreed  upon  without  exceptions,  in 
which  the  statements  and  recommendations  which  follow  are  em- 
bodied. These  statements  constitute  a  very  brief  summary  of  the 
entire  report,  wThich  should  be  read  as  a  whole  if  a  complete  under- 
standing of  their  results  and  findings  is  desired. 

Throughout  the  report  the  term  "  scientific  management "  is  under- 
stood to  mean  the  system  devised  and  applied  by  Frederick  W. 
Taylor,  H.  L.  Gantt,  Harrington  Emerson  and  their  followers,  with 
the  object  of  promoting  efficiency  in  shop  management  and  operation. 

The  report,  unanimously  agreed  upon  by  the  commission's  inves- 
tigator and  his  advisory  experts,  is  the  basis  for  the  following 
statements. 

POSSIBLE  BENEFITS  OF  SCIENTIFIC   MANAGEMENT  TO  LABOR  AND   SOCIETY. 

1.  As  a  system,  scientific  management  presents  certain  possible 
benefits  to  labor  and  to  society : 

(a)  A  close  casual  relation  exists  between  productive  efficiency  and 
possible  wages.     Greater  efficiency  and  output  make  possible  higher 
wages  in  general  and  better  conditions  of  employment  and  labor. 

In  so  far,  then,  as  scientific  management  affords  opportunities  for 
lower  costs  and  increased  production  without  adding  to  the  burden 
of  the  workers  in  exhaustive  effort,  long  hours,  or  inferior  working 
conditions,  it  creates  the  possibility  of  very  real  and  substantial 
benefits  to  labor  and  to  society. 

(b)  It  is  the  policy  of  scientific  management,  as  a  preliminary  to 
strictly  labor  changes,  to  bring  about  improvement  and  standardiza- 
tion of  the  material  equipment  and  productive  organization  of  the 
plant,  particularly : 

Machinery:  Installation,  repair,  operation. 

Tools:  Storage,  care,  delivery. 

Material  equipment :  Rearrangement  to  avoid  delays,  etc. 

Product:  Devices  for  economical  and  expeditious  handling  and 
routing. 

Processes  and  methods:  Elimination  of  Avaste  motions,  improve- 
ment of  accessories,  etc. 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  129 


Reorganization  of  managerial  staff  and  improvement  of  managerial 
efficiency. 

Reorganization  of  sales  and  purchasing  departments  with  a  view  to 
broadening  and  stabilizing  the  market. 

Improvements  in  methods  of  storekeeping  and  regulation  of  deliv- 
ery, surplus  stock,  etc. 

All  such  improvements  are  to  be  commended,  and  investigation 
shows  that  they  are  not  only  accepted  by  labor  without  opposition 
but  are,  in  fact,  welcomed. 

2.  Scientific  management  in  its  direct  relation  to  labor  is  not  devoid 
of  beneficial  aspects,  inasmuch  as  it  is  to  a  large  extent  an  attempt  at 
immediate  standardization  of  labor  conditions  and  relations.    It  may 
also  serve  labor  by  calling  the  attention  of  the  employer  to  the  fact 
that  there  are  other  and  more  effective  ways  to  meet  severe  com- 
petition than  by  "  taking  it  out  of  labor." 

It  is  true  that  scientific  management  and  organized  labor  are  not 
altogether  in  harmony  in  their  attitude  toward  standardization  of 
labor  conditions  and  relations.  While  both  seek  to  have  the  con- 
ditions of  work  and  pay  clearly  defined  and  definitely  maintained  at 
any  given  moment,  they  differ  fundamentally  as  to  the  circumstances 
which  may  justly  cause  the  substitution  of  new  standards  for  old 
ones.  Trade-unionism  tends  to  hold  to  the  idea  that  standards  must 
not  be  changed  in  any  way  to  the  detriment  of  the  workers.  Scien- 
tific management,  on  the  other  hand,  regards  changes  as  justified  and 
desirable  if  they  result  in  increase  of  efficiency,  and  has  provided 
methods,  such  as  time  study,  for  the  constant  suggestion  of  such 
changes. 

3.  The  same  may  be  said  of  many  other  major  claims  of  scientific 
management.    Whether  the  ideals  advocated  are  attained  or  at  pres- 
ent attainable,  and  whether  scientific  managers  are  to  be  found  who 
purposely  violate  them,  scientific  management  has  in  these  claims 
and  in  the  methods  upon  which  they  are  based  shown  the  way  along 
which  we  may  proceed  to  more  advantageous  economic  results  for 
labor  and  for  society.    It  may  not  have  succeeded  in  establishing  a 
practical  system  of  vocational  selection  and  adaptation,  but  it  has 
emphasized  the  desirability  of  it;  it  may  not  set  the  task  with  due 
and  scientific  allowance  for  fatigue  so  that  the  worker  is  guarded 
against  overspeeding  and  overexertion,  but  it  has  undoubtedly  de- 
veloped methods  which  make  it  possible  to  better  prevailing  condi- 
tions in  this  respect;  it  has  called  attention  most  forcibly  to  the  evils 
of  favoritism  and  the  rough  and  arbitrary  decisions  of  foremen  and 
others  in  authority.    If  scientific  management  be  shown  to  have  posi- 
tive objectionable  features,  from  both  the  standpoint  of  labor  and 
the  welfare  of  society,  this  constitutes  no  denial  of  these  beneficial 
features,  but  calls  rather  for  intelligent  social  action  to  eliminate 
that  which  is  detrimental  and  to  supplement  and  control  that  which 

beneficial  to  all. 


is  oenen< 

SCIENTIF 

4.  Cor 
systei 
demo 
inpn 


1C    MANAGEMENT    IN    PRACTICE — ITS    DIVERSITIES    AND    DEFECTS, 


4.  Conditions  in  actual  shops  do  not  conform  to  the  ideals  of  the 
stem,  and  show  no  general  uniformity.    Actual  field  investigations 
emonstrated  beyond  reasonable  doubt  that  scientific  management 
practice  is  characterized  by  striking  incompleteness  and  manifold 
38819°— 16 9 


130  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

diversity  as  compared  with  the  theoretical  exposition  of  its  advo- 
cates. This  incompleteness  and  diversity  in  practice  apply  not  only 
to  matters  of  detail  but  cover  many  of  the  essential  features  of 
scientific  management  even  among  those  shops  designated  by  Taylor, 
Gantt,  and  Emerson  as  representative  of  their  work  and  influence. 
The  following  particular  defects  were  observed: 

(a)  Failure  to  carry  into  effect  ^vith  any  degree  of  thoroughness 
the  general  elements  involved  in  the  system. — This  may  take  the 
form  of  ignoring  either  ^the  mechanical  equipment  and  managerial 
organization,  adopting  simply  a  few  routine  features,  such  as  time 
study  and  bonus  payment,  or  the  adoption  of  all  mechanical  features 
with  a  complete  disregard  of  the  spirit  in  which  they  are  supposed 
to  be  applied. 

(5)  Failure  to  adopt  the  full  system  of  "functional  foreman- 
ship" — The  results  of  prevailing  practices  do  not  support  the  claim 
that  scientific  management  treats  each  workman  as  an  independent 
personality  and  that  it  substitutes  joint  obedience  to  fact  and  law  for 
obedience  to  personal  authority. 

(c)  Lack  of  uniformity  in  the  method  of  selecting  and  hiring 
help. — Upon  the  whole  the  range  of  excellence  in  methods  of  selec- 
tion and  hiring  in  "  scientific  "  shops  was  the  same  as  in  other  shops. 
The  workers  in  scientific-management  shops  seem  to  be  a  select  class 
when  compared  with  the  same  classes  of  workers  outside,  but  this 
result  seems  to  be  due  to  the  weeding  out  of  the  less  satisfactory 
material  rather  than  to  initial  methods  of  selection. 

(d)  Failure  to  substantiate  claims  of  scientific  management  with 
reference  to  the  adaptation,  instruction,  and  training  of  workers. — 
Scientific-management  shops  in  general  depend  upon  nothing  in  the 
way  of  occupational  adaptation  of  the  workers  except  the  ordinary 
trial  and  error  method.    Investigation  reveals  little  to  substantiate  the 
sweeping  claims  of  scientific  managers  made  in  this  connection,  except 
that  in  the  better  scientific-management  shops  many  workmen  are 
receiving  more  careful  instruction  and  a  higher  degree  of  training 
than  is  at  present  possible  for  them  elsewhere.    The  most  that  can 
be  said  is  that  scientific  management,  as  such,  furthers  a  tendency 
to  narrow  the  scope  of  the  workers'  industrial  activity,  and  that  it 
falls  far  short  of  a  compensatory  equivalent  in  its  ideals  and  actual 
methods  of  instruction  and  training. 

e)  Lack  of  scientific  accuracy,  uniformity,  and  justice  in  time 
study  and  task  setting. — Far  from  being  the  invariable  and  purely 
objective  matters  that  they  are  pictured,  the  methods  and  results  of 
time  study  and  task  setting  are  in  practice  the  special  sport  of  indi- 
vidual judgment  and  opinion,  subject  to  all  the  possibilities  of  diver- 
sity, inaccuracy,  and  injustice  that  arise  from  human  ignorance  and 
prejudice. 

The  objects  of  time  study  are:  (1)  Improvement  and  standardiza- 
tion of  the  methods  of  doing  the  work,  without  reference  to  a  stand- 
ard time  for  its  accomplishment,  and  (2)  fixing  of  a  definite  task 
time  of  efficiency  scale. 

Possibilities  of  great  advantage  exist  in  the  use  of  time  study  for 
the  first  purpose.  However,  in  a  large  number  of  shops,  time  study 
for  this  purpose  is  practically  neglected. 

In  connection  with  the  second  purpose,  setting  of  task  time  or 
efficiency  scale,  great  variations  are  noted,  and  especially  the  part 


pr 
ge: 
re* 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  131 

which  fallible  individual  judgment  and  individual  prejudice  may 
and  do  play. 

Detailed  observations  of  the  practice  of  making  time  studies  and 
setting  tasks  showed  great  variations  in  methods  and  results.  Seven- 
teen separate  sources  of  variation  are  pointed  out,  any  one  of  which 
is  sufficient  to  and  in  practice  does  greatly  influence  the  results  of 
time  studies. 

In  face  of  such  evidence  it  is  obviously  absurd  to  talk  of  time  study 
as  an  accurate  scientific  method  in  practice  or  of  the  tasks  set  by 
means  of  it  as  objective  scientific  facts  which  are  not  possible  or 
proper  subjects  of  dispute  and  bargaining. 

Furthermore,  the  time-study  men  upon  whom  the  entire  results 
depend  were  found  to  be  prevailingly  of  the  narrow-minded  mechani- 
cal type,  poorly  paid,  and  occupying  the  lowest  positions  in  the  man- 
agerial organization,  if  they  could  be  said  to  belong  at  all  to  the 
managerial  group.  Nor  does  the  situation  seem  to  promise  much  im- 
rovement,  for  the  position  and  pay  accorded  to  time-study  men 

nerally  are  such  as  to  preclude  the  drawing  into  this  work  of 
really  competent  men  in  the  broader  sense.  Aside  from  a  few 
notable  exceptions  in  the  shops  and  some  men  who  make  a  general 
profession  of  time  study  in  connection  with  the  installation  of  scien- 
tific management,  this  theoretically  important  functionary,  as  a  rule, 
receives  little  more  than  good  mechanic's  wages  and  has  little  voice 
in  determining  shop  policies.  In  fact,  the  time-study  man,  who,  if 
scientific  management  is  to  make  good  the  most  important  of  its 
labor  claims,  should  be  among  the  most  highly  trained  and  influential 
officials  in  the  shop,  a  scientist  in  viewpoint,  a  wise  arbitrator  be- 
tween employer  and  workman,  is  in  general  a  petty  functionary,  a 
specialist  workman,  a  sort  of  clerk  who  has  no  voice  in  the  counsels 
of  the  higher  officials. 

However,  the  method  of  time  study  is  not  necessarily  impracticable 
or  unjust  to  the  workers.  Under  proper  direction  time  study  prom- 
ises much  more  equitable  results  than  can  be  secured  by  the  ordinary 
methods.  The  greatest  essential  is  a  time-study  man  of  exceptional 
knowledge,  judgment,  and  tact.  The  average  time-study  man  does 
not  fulfill  these  requirements  at  present. 

Finally,  it  is  only  in  connection  with  standard  products,  requiring 
only  moderate  skill  and  judgment  in  layout  and  work,  that  economy 
seems  to  allow  adequate  application  of  the  time-study  method.  Its 
natural  sphere  seems  to  be  routine  and  repetitive  work.  As  long  as 
industry  continues  to  be  as  complex  and  diversified  as  it  is,  this  ele- 
ment of  economy  will  without  doubt  continue  to  operate  in  a  way 
to  limit  the  legitimate  scope  of  time  study  and  task  setting.  Task 
setting  as  at  present  conducted  is  not  satisfactory  to  workmen  and 
creates  dissatisfaction  and  jealousy. 

(f)  ^Failure  to  substantiate  the  claim  of  having  established  a 
scientific  and  equitable  method  of  determining  wage  rates. — In 
analyzing  the  wage-fixing  problem  in  connection  with  scientific 
management  two  matters  are  considered:  (1)  The  "base  rate,5'  some- 
times called  the  day  wage,  which  constitutes  for  any  group  of  work- 
ers the  minimum  earnings  or  indicates  the  general  wage  level  for 
that  group,  and  (2)  added  "efficiency  payments,"  which  are  sup- 
posed to  represent  special  additional  rewards  for  special  attainments. 


132  KEPOST  OF   COMMISSION   ON   INDUSTRIAL  KELATIONS. 


^  investigators  sought  in  vain  for  any  scientific  methods  de- 

vised or  employed  by  scientific  management  for  the  determination 
of  the  base  rate,  either  as  a  matter  of  justice  between  the  conflicting 
claims  of  capital  and  labor,  or  between  the  relative  claims  of  in- 
dividuals and  occupational  groups. 

Kates  for  women  with  reference  to  men  are,  as  a  rule,  on  the  same 
basis  in  scientific-management  shops  as  in  other  shops.  One  leader 
said,  "There  is  to  be  no  nonsense  about  scientific  management.  If 
by  better  organization  and  administration  what  is  now  regarded  as 
man's  work  can  be  done  by  women,  women  will  be  employed  and 
women's  wages  will  be  paid." 

Scientific-management  shops  seem  as  ready  as  others  to  raise  the 
rates  as  the  wage  level  generally  advances. 

"  Bewildering  diversity  "  prevails  in  relation  to  the  "  efficiency 
payment"  or  reward  for  special  effort.  After  a  careful  and  ex- 
tended analysis  and  investigation  of  the  different  ways  of  reward- 
ing individual  increases  in  output,  it  was  concluded: 

All  of  these  systems  definitely  belie  the  claim  that  scientific  man- 
agement pays  workers  in  proportion  to  their  efficiency.  One  of  them 
has  the  obvious  intent  of  weeding  out  the  lower  grade  of  workers, 
while  the  other  two  are  so  constituted  as  to  make  such  workers  very 
unprofitable  to  the  employers.  Two  of  them,  lend  themselves  easily  to 
the  exploitation  of  mediocre  workers  —  those  who  can  deliver  a  medium 
output  but  can  not  attain  to  a  standard  task  set  high.  All  of  them 
furnish  a  strong  stimulus  to  high  efficiency  and  output,  but  in  them- 
selves furnish  no  visible  check  on  overspeeding  and  exhaustion.  All 
of  them  are  capable  of  being  liberally  applied,  but  all  can  also  be  used 
as  instruments  of  oppression  through  the  undue  severity  of  task  set- 
ting or  efficiency  rating. 

There  can  be  no  doubt  that  under  scientific  management  rates  are 
cut.  But  to  say  positively  that  scientific  management,  on  the  whole, 
furthers  the  cutting  of  rates  is  quite  another  matter.  The  fact  seems 
clear  that  at  this  point  there  is  a  conflict  of  tendencies  within  the  thing 
itself.  There  is  a  strong  inducement  for  scientific  managers  to  main- 
tain rates  strictly,  and  the  honest  efforts  of  those  who  deserve  the 
name  to  so  maintain  them  can  hardly  be  impugned.  At  the  sanio 
time,  however,  the  greatest  advance  toward  efficiency,  for  which 
scientific  management  stands,  is  obtained  by  the  constant  alteration 
of  conditions  and  tasks  through  time  study.  Such  alterations  almost 
of  necessity  mean  constant  rate  cutting.  Were  industry  once  stand- 
ardized for  good  and  all,  scientific  management  would  undoubtedly 
operate  as  an  unequivocal  force  tending  to  the  maintenance  of  rates. 
As  it  is  with  industry  in  flux,  what  amounts  to  rate  cutting  seems  to 
be  almost  of  necessity  an  essential  part  of  its  very  nature. 

Finally,  all  of  the  systems  of  payment  tend  to  center  the  attention 
of  the  worker  on  his  individual  interest  and  gain  and  to  repress  the 
development  of  group  consciousness  and  interest.  Where  the  work 
of  one  man  is  independent  of  another,  the  individual  has  no  motive 
to  consider  his  fellow,  since  his  work  and  pay  in  no  wise  depend  on 
the  other  man.  What  either  does  will  not  affect  the  other's  task  or 
rates.  Where  work  is  independent,  the  leader  can  not  afford  to  slow 
down  to  accommodate  his  successor. 

It  must  be  admitted  that  these  systems  are  admirably  suited  to 
stimulate  the  workers,  but  in  so  far  as  there  may  be  virtue  in  the 


EEPOET  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  133 


5 


union  principles  of  group  solidarity  and  uniformity,  and  in  so  far 
as  they  lay  claim  to  scientific  accuracy  or  a  special  conformity  to 
justice  in  reward,  they  must  be  judged  adversely. 

(g)  Failure  to  protect  the  workers  from  overexertion  and  exhaus- 
tion.— It  is  claimed  by  scientific  management  that  protection  to 
orkers  is  afforded  by  such  devices  as:  Standardization  of  equip- 
ient  and  performance ;  substitution  of  exact  knowledge  of  men  and 
f  machines  for  guesswork  in  the  setting  of  the  task  and  the  deter- 
mination of  -the  hours  and  other  conditions  of  work ;  careful  studies 
of  fatigue;  elimination  of  the  need  for  pace  setters;  transformation 
of  speeders  into  instructors,  and  transfer  of  responsibility  from  the 
workers  to  the  management  for  contriving  the  best  methods  of  work ; 
maintenance  of  the  best  conditions  for  performing  work  through  fur- 
nishing the  best  tools  and  materials  at  the  proper  time  and  place; 
instruction  of  the  wrorkers  in  the  most  economical  and  easiest  methods 
of  performing  operations;  institution  of  rational  rest  periods  and 
modes  of  recreation  during  working  hours;  and  surrounding  the 
workers  with  the  safest  and  most  sanitary  shop  conditions. 

Investigation  indicates  that  scientific  management,  in  practice,  fur- 
nishes no  reasonable  basis  for  the  majority  of  these  specific  claims 
in  the  present,  and  little  hope  for  their  realization  in  the  near  future. 
In  these  matters,  indeed,  the  utmost  variation  prevails  in  scientific 
management  as  in  other  shops.  Several  admirable  cases  were  found 
with  respect  to  all  these  matters,  but  shops  were  not  wanting  where 
the  management  exhibited  the  utmost  suspicion  of  the  workers,  refer- 
ring continually  to  their  disposition  to  "beat  the  time-study  man," 
although  the  time  study  in  such  shops  was  obviously  based  on  the 
work  of  speeders  and  all  sorts  of  inducements  were  offered  for  pace 
setting,  where  instruction  and  training  of  the  workers  w^ere  empha- 
sized by  their  absence,  and  where  the  general  conditions  of  the  work 
w^ere  much  in  need  of  improvement. 

The  investigation  seems  to  show  clearly  that  practical  scientific 
management  has  not  materially  affected  the  length  of  the  working 
day.  Aside  from  shops  where  the  management  was  evidently  imbued 
with  a  strong  moral  sense,  the  hours  of;  labor  in  these  shops  were 
those  common  to  the  industry  and  the  locality. 

When  we  come  to  the  matter  of  fatigue  studies  and  their  connec- 
tion with  speeding  and  exhaustion,  the  claims  of  scientific  manage- 
ment seem  to  break  down  completely.  No  actual  fatigue  studies 
were  found  taking  place  in  the  shops,  and  the  time-study  men,  who 
should  be  charged  with  such  studies,  seemed  in  general  to  be  quite 
indifferent  or  quite  ignorant  in  regard  to  this  whole  matter.  This 
does  not  mean  that  no  attention  to  fatigue  is  given  in  scientific  man- 
agement shops.  Cases  were  found  where  the  health  and  energy  of 
the  workers  wTere  carefully  observed  and  attempts  were  made  to 
adopt  the  work  to  their  condition,  but  the  methods  employed  were 
the  rough-and-ready  ones  of  common-sense  observation.  Best  periods 
and  modes  of  recreation  during  the  working  hours  are  a  regular 
institution  on  an  extended  scale  in  but  one  shop  visited  by  the  inves- 
tigators. Isolated  instances  were  encountered  elsewhere,  but  man- 
agers in  general  apparently  do  not  even  entertain  the  idea  of  their 
institution. 

Scientific  management  does  not  always  surround  the  workers  with 
the  safest  and  most  sanitary  shop  conditions.  In  general,  scientific 


134  BEPOET  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

management  shops  seem  to  be  good  shops  as  shops  go.  The  introduc- 
tion of  the  system  has  the  tendency  without  doubt  to  clean  the  shop 
up  and  to  improve  the  condition  of  belting,  machinery,  and  arrange- 
ment of  material  equipment  generally.  All  this  is  in  the  direct 
line  of  efficiency  and  safety.  Several  very  notable  examples  of 
excellence  in  safety  and  sanitation  were  found.  On  the  other  hand, 
several  shops  visited  were  below  good  standards  in  these  respects, 
and  flagrant  specific  violations  of  safety  rules  were  encountered. 

As  a  wrhole,  the  facts  in  nowise  justify  the  assumption  that  scien- 
tific management  offers  any  effective  guaranty  against  overspeeding 
and  exhaustion  of  workers.  The  investigation  left  a  strong  impres- 
sion that  scientific  management  workers  in  general  are  not  over- 
speeded,  but  the  challenge  to  show  any  overspeeded  or  overworked 
men  in  scientific  management  shops  in  very  easily  met.  The  situa- 
tion in  this  respect  varies  much  wdth  the  industry.  Some  instances 
of  undoubted  overspeeding  were  found,  particularly  in  the  case  of 
girls  and  women.  But  these  instances  do  not  warrant  a  general 
charge.  On  the  other  hand,  there  appears  to  be  nothing  in  the  special 
methods  of  scientific  management  to  prevent  speeding  up  where  the 
technical  conditions  make  it  possible  and  profitable,  and  there  is 
much  in  these  methods  to  induce  it  in  the  hands  of  unscrupulous 
employers. 

(A)  Failure  to  substantiate  the  claim  that  scientific  management 
offers  exceptional  opportunities  for  advancement  and  promotion  on 
a  basis  of  individual  merit. — While  scientific  management  undoubt- 
edly separates  the  efficient  from  the  inefficient  more  surely  and 
speedily  than  ordinary  methods,  it  was  shown  by  the  investigation 
that  scientific  management  often  fails  in  the  development  of  func- 
tional foremanship  and  in  the  elimination  of  favoritism.  It  tends 
to  create  a  multitude  of  new  tasks  on  which  less  skill  is  required  and 
lower  rates  can  be  paid.  It  has  developed  no  efficient  system  for  the 
placing  or  adaptation  of  the  workers.  It  is  inclined  in  practice  to 
regard  a  worker  as  adapted  to  his  work  and  rightly  placed  when  he 
succeeds  in  making  the  task.  It  tends  to  confine  the  mass  of  work- 
men to  one  or  two  tasks,  and  offers  little  opportunity,  therefore,  for 
the  discovery  and  development  of  special  aptitudes  among  the  masses. 
It  tends  to  divide  the  workers  into  two  unequal  classes — the  few 
who  rise  to  managerial  positions  and  the  many  who  seem  bound  to 
remain  task  workers  within  a  narrow  field.  In  the  ideal  it  offers 
opportunity  for  promotion  from  the  ranks,  and  this  works  out  to  a 
certain  extent  in  practice,  but  not  universally. 

There  is  a  great  deal  of  exaggeration,  too,  in  statements  made  con- 
cerning special  rewards  for  usable  suggestions.  Few  of  the  shops 
make  any  systematic  rewards  of  this  kind,  and  where  this  is  the  case 
the  rewards  are  usually  trivial.  In  one  shop  the  investigator  was 
shown  an  automatic  machine  invented  by  a  workman,  which  did  the 
work  of  several  hand  workers.  "Did  he  receive  a  reward?  "  was 
asked.  "  Oh,  yes,"  came  the  answer,  "  his  rate  of  pay  was  increased 
from  17  to  22  cents  per  hour." 

(i)  With  reference  to  the  alleged  methods  and  severity  of  dis- 
cipline under  scientific  management  the  "  acrimonious  criticism " 
from  trade  unions  does  not  seem  to  be  warranted. — In  theory,  the 
scientific  managers  appear  to  have  the  best  of  the  argument,  and  in 


REPORT  OF   COMMISSION   OS"  INDUSTRIAL  RELATIONS.  135 

practice  the  investigation  showed  an  agreeable  absence  of  rough 
and  arbitrary  disciplinary  authority.  When  the  tasks  were  liberally 
set,  the  workers  were  found  generally  operating  without  special 
supervision  except  where  instructions  or  assistance  were  needed. 
Deductions  were  indeed  made  for  poor  work  and  destruction  of  ma- 
terials, but  in  the  better  class  of  shops  apparently  with  no  greater 
and  perhaps  with  less  than  ordinary  severity. 

While  it  should  be  remembered  that  the  shops  selected  represented 
probably  the  best  of  the  shops  operating  under  this  system,  in  gen- 
eral, it  would  seem  that  scientific  management  does  lessen  the  rigors 
of  discipline  as  compared  with  other  shops  where  the  management  is 
autocratic  and  the  workers  have  no  organization, 

(/')  Failure  to  substantiate  the  claim  that  workers  are  discharged 
only  on  just  grounds  and  have  an  effective  appeal  to  the  highest 
managerial  authority. — This  whole  matter  is  one  in  which  neither 
management  claims  nor  union  complaints  seem  susceptible  of  proof, 
but  the  investigation  indicates  that  the  unions  have  legitimate  basis 
for  charging  that  discharge  is  generally  a  matter  of  arbitrary 
managerial  authority. 

(k)  Lack  of  democracy  under  scientific  management. — As  a  result 
of  the  investigation,  there  can  be  little  doubt  that  scientific  manage- 
ment tends  in  practice  to  weaken  the  power  of  the  individual  worker 
as  against  the  employer,  setting  aside  all  questions  of  personal  atti- 
tude and  the  particular  opportunities  and  methods  for  voicing  com- 
plaints and  enforcing  demands.  It  gathers  up  and  transfers  to  the 
management  the  traditional  craft  knowledge  and^  transmits  this 
again  to  the  workers  only  piecemeal  as  it  is  needed  in  the  perform- 
ance of  the  particular  job  or  task.  It  tends  in  practice  to  confine 
each  worker  to  a  particular  task  or  small  cycle  of  tasks.  It  thus 
narrows  his  outlook  and  skill  to  the  experience  and  training  which 
are  necessary  to  do  the  work.  He  is  therefore  easier  of  displacement. 
Moreover,  the  changing  of  methods  and  conditions  of  work  and  the 
setting  of  tasks  by  time  study  with  its  assumption  always  of  scientific 
accuracy  puts  the  individual  worker  at  a,  disadvantage  in  any  attempt 
to  question  the  justice  of  the  demands  made  upon  him.  The  onus 
of  proof  is  upon  him  and  the  standards  of  judgment  are  set  up  by 
the  employer,  covered  by  the  mantle  of  scientific  accuracy. 

It  would  seem  also  that  scientific  management  tends,  on  the  whole, 
to  prevent  the  formation  of  groups  of  workers  within  the  shop  with 
recognized  common  interests,  and  to  weaken  the  solidarity  of  those 
which  exist.  Almost  everything  points  to  the  strengthening  of  the 
individualistic  motive  and  the  weakening  of  group  solidarity.  Each 
worker  is  bent  on  the  attainment  of  his  individual  task.  He  can  not 
combine  with  his  fellows  to  determine  how  much  that  task  shall  be, 
If  the  individual  slows  down  he  merely  lessens  his  wages  and  preju- 
dices his  standing  without  helping  his  neighbor.  If  he  can  beat 
the  other  fellow,  he  helps  himself  without  directly  affecting  the 
other's  task  or  pay.  Assistance,  unless  the  man  is  a  paid  instructor, 
is  at  personal  cost.  Special  rewards,  where  offered,  are  for  the  indi- 
vidual. Rules  of  seniority  are  not  recognized.  Sometimes  personal 
rivalry  is  stimulated  by  the  posting  of  individual  records  or  classifi- 
cation of  the  workers  by  name  into  "  excellent,"  "  good,"  "  poor,"  etc. 
Potential  groups  are  broken  up  by  the  constant  changes  in  methods 
and  reclassification  of  workers  which  are  the  mission  of  time  study. 


136  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

The  whole  gospel  of  scientific  management  to  the  worker  is  to  the 
individual,  telling  him  how,  by  special  efficiency,  he  can  cut  loose 
from  the  mass,  and  rise  in  wages  or  position. 

With  the  power  of  the  individual  weakened  and  the  chances 
lessened  for  the  development  of  groups  and  group  solidarity,  the 
democratic  possibility  of  scientific  management,  barring  the  presence 
of  unionism,  would  seem  to  be  scant.  The  individual  is  manifestly  in 
no  position  to  cope  with  the  employer  on  a  basis  of  equality.  The 
claim  to  democracy  based  on  the  close  association  of  the  management 
and  the  men  and  the  opportunities  allowed  for  the  voicing  of  com- 
plaints is  not  borne  out  by  the  facts ;  and  in  the  general  run  of  scien- 
tific-management shops,  barring  the  presence  of  unionism  and  col- 
lective bargaining,  the  unionists  are  justified  in  the  charge  that  the 
workers  have  no  real  voice  in  hiring  and  discharging,  the  setting  of 
the  task,  the  determination  of  the  wage  rates,  or  the  general  condi- 
tions of  employment.  This  charge  is  true  even  where  the  employers 
have  no  special  autocratic  tendencies,  much  more  so  therefore  where, 
as  in  many  cases,  they  are  thoroughly  imbued  with  the  autocratic 
spirit.  With  rare  exceptions,  then,  democracy  under  scientific  man- 
agement can  not  and  does  not  exist  apart  from  unionism  and  collec- 
tive bargaining. 

Does  the  scientific  manager,  as  a  matter  of  fact,  welcome  the  coop- 
eration of  unionism?  Here,  again,  the  facts  should  decide  the  con- 
tention. The  fact  is  that  while  in  numbers  of  scientific-management 
shops  some  unionists  are  employed,  they  are  not  generally  employed 
as  union  men,  and  the  union  is  rarely  recognized  and  dealt  with  as 
such.  The  fact  is  that  those  who  declare  the  willingness  of  scientific 
management  to  welcome  the  cooperation  of  unionism  in  general  either 
know  nothing  about  unionism  and  its  rules  and  regulations  or 
are  thinking  of  a  different  kind  of  unionism  from  that  to  which  the 
American  Federation  of  Labor  stands  committed  and  a  kind  of  co- 
operation foreign  to  its  ideals  and  practices. 

To  sum  up,  scientific  management  in  practice  generally  tends  to 
weaken  the  competitive  power  of  the  individual  worker  and  thwarts 
the  formation  of  shop  groups  and  weakens  group  solidarity;  more- 
over, generally  scientific  management  is  lacking  in  the  arrangements 
and  machinery  necessary  for  the  actual  voicing  of  the  workers'  ideas 
and  complaints  and  for  the  democratic  consideration  and  adjustment 
of  grievances.  Collective  bargaining  has  ordinarily  no  place  in  the 
determination  of  matters  vital  to  the  workers,  and  the  attitude 
toward  it  is  usually  tolerant  only  when  it  is  not  understood.  Finally 
unionism,  where  it  means  a  vigorous  attempt  to  enforce  the  viewpoint 
and  claims  of  the  workers,  is  in  general  looked  upon  with  abhorrence, 
and  unions  which  are  looked  upon  with  complacency  are  not  the 
kind  which  organized  labor  in  general  wants,  while  the  union  cooper- 
ation which  is  invited  is  altogether  different  from  that  which  they 
stand  ready  to  give.  In  practice  scientific  management  must,  there- 
fore be  declared  autocratic  in  tendency — a  reversion  to  industrial 
autocracy,  which  forces  the  workers  to  depend  on  the  employers'  con- 
ception of  fairness  and  limits  the  democratic  safeguards  of  the 
workers. 

5.  Scientific  management  is  still  in  its  infancy  or  early  trial  stages, 
and  immaturity  and  failure  to  attain  ideals  in  practice  are  necessary 
accompaniments  to  the  development  of  any  new  industrial  or  social 


EEPOET  OF  COMMISSION  ON  INDUSTRIAL  EELATIONS.  137 


movement.    Doubtless  many  of  its  diversities  and  shortcomings  will, 
therefore,  be  cured  by  time. 

Before  this  can  be  brought  about,  however,  certain  potent  causes  of 
resent  evil  must  be  eradicated: 

(a)  The  first  of  these  is  a  persistent  attempt  on  the  part  of  experts 
nd  managers  to  apply  scientific  management  and  its  methods  outside 
their  natural  sphere. 

(&)  A  second  chief  source  of  danger  and  evil  to  labor  in  the 
application  of  scientific  management  is  that  it  offers  its  wares  in  the 

en  market,  but  it  has  developed  no  means  by  which  it  can  control 
,  use  of  these  by  the  purchaser.  In  large  part  the  practical  de- 
.arture  of  scientific  management  from  its  ideals  is^  the  result  of 
pecial  managerial  or  proprietorial  aims  and  impatience  of  delay 
n  their  fulfillment.  The  expert  is  frequently  called  in  because  the 
.stablishment  is  in  financial  or  industrial  straits,  and  the  chief  con- 
cern of  the  management  is  quick  increase  of  production  and  profits. 
It  must  meet  its  competitors  here  and  now,  and  can  not  afford  to 
expend  more  than  is  necessary  to  do  this,  or  to  forego  immediate 
returns  while  the  foundations  are  being  laid  for  a  larger  but  later 
success,  and  with  careful  regard  to  immediate  justice  and  the  long- 
time welfare  of  its  working  force.  The  outcome  frequently  is  con- 
flict between  the  systematizer  and  the  management,  resulting  in  the 
abandonment  of  the  scheme  only  partially  worked  out  on  the  retire- 
ment of  the  expert,  leaving  the  management  to  apply  crudely  the 
methods  partially  installed,  sometimes  to  the  detriment  of  the  work- 
ers and  their  interests. 

It  is  true  that  the  situation  thus  outlined  is  not  of  universal  appli- 
cation. But  bitter  complaints  were  frequently  heard  from  members 
of  the  small  ^roup  of  experts  who  represent  the  highest  ideals  and 
intelligence  of  the  movement,  in  regard  to  the  managerial  opposition 
which  they  have  encountered,  and  frequent  apologies  were  offered 
for  the  conditions  and  results  of  their  work,  accompanied  by  the 
statement  that  they  could  go  no  further  than  the  management  would 
allow,  or  that  things  had  been  done  by  the  management  against  their 
judgment  and  for  which  they  could  not  stand.  Moreover,  scientific 
management  is  closely  interlocked  with  the  mechanism  of  production 
for  profit  and  the  law  of  economy  rules.  Many  things  which  would 
be  desirable  from  the  ideal  standpoint,  and  which  are  a  practical 
necessity  if  the  interests  of  the  workers  are  to  be  fully  protected, 
are  not  always  or  usually  economical.  This  is  specially  true  of  time 
study,  task  setting,  and  rate  making. 

The  arbitrary  will  of  the  employer  and  the  law  of  economy  are 
two  potent  special  forces  which  contribute  to  the  existing  diversity, 
incompleteness,  and  crudity  of  scientific  management  as  it  is  prac- 
ticed, even  where  the  systematizer  is  possessed  of  the  highest  intelli- 
gence and  imbued  with  the  best  motives  of  his  group. 

(<?)  But  to  explain  the  situation  as  it  exists  at  present,  two  other 
important  factors  must  be  taken  into  consideration.  The  first  of 
these  is  the  existence  and  practice  of  self-styled  scientific  management 
systematizers  and  time  study  experts  who  lack  in  most  respects  the 
ideals  and  the  training  essential  to  fit  them  for  the  work  which  they 
claim  to  be  able  to  do.  Scientific  management  as  a  movement  is 
cursed  with  fakirs.  The  great  rewards  which  a  few  leaders  in  the 
movement  have  secured  for  their  services  have  brought  into  the  field 


138  EEPOET  OF  COMMISSION   ON  INDUSTRIAL  KELATIONS. 

a  crowd  of  industrial  "  patent  medicine  men."  The  way  is  open  to 
all.  No  standards  or  requirements,  private  or  public,  have  been 
developed  by  the  application  of  which  the  goats  can  be  separated 
from  the  sheep.  Employers  have  thus  far  proved  credulous.  Almost 
anyone  can  show  the  average  manufacturing  concern  where  it  can 
make  some  improvements  in  its  methods.  So  the  scientific  manage- 
ment shingles  have  gone  up  all  over  the  country,  the  fakirs  have  gone 
into  the  shops,  and  in  the  name  of  scientific  management  have  reaped 
temporary  gains  to  the  detriment  of  both  the  employers  and  the 
workers. 

(d)  Fake  scientific  management  experts,  however,  are  not  alone 
responsible  for  the  lack  of  training  and  intelligence  which  contributes 
to  the  diversity  and  immaturity  of  scientific  management  in  practice 
and  its  failure  to  make  good  the  labor  claims  of  its  most  distinguished 
leaders.  The  fact  is  that  on  the  whole,  and  barring  some  notable 
exceptions,  the  sponsors  and  adherents  of  scientific  management — 
experts  and  employers  alike — are  profundly  ignorant  of  very  much 
that  concerns  the  broader  humanitarian  and  social  problems  which 
it  creates  and  involves,  especially  as  these  touch  the  character  and 
welfare  of  labor. 

It  is  because  of  this  ignorance  and  unwarranted  assurance  that 
there  is  a  strong  tendency  on  the  part  of  scientific  management 
experts  to  look  upon  the  labor  end  of  their  work  as  the  least  difficult 
and  requiring  the  least  careful  consideration.  To  their  minds  the 
delicate  and  difficult  part  of  the  task  of  installation  is  the  solution 
of  the  material,  mechanical,  and  organic  problems  involved.  They 
tend  to  look  upon  the  labor  end  of  their  work  as  a  simple  technical 
matter  of  so  setting  tasks  and  making  rates  that  the  workers  will 
give  the  fullest  productive  cooperation.  They  tend  naively  to  assume 
that  when  the  productivity  of  the  concern  is  increased  and  the  la- 
borers are  induced  to  do  their  full  part  toward  this  end,  the  labor 
problem  in  connection  with  scientific  management  is  satisfactorily 
solved.  In  short,  in  the  majority  of  cases  the  labor  problem  appears 
to  be  looked  at  as  one  aspect  of  the  general  problem  of  production 
in  the  shop,  and  it  is  truthfully  assumed  that  if  it  is  solved  with 
reference  to  this  problem  it  must  also  be  solved  with  due  regard 
to  labor's  well-being  and  its  just  demands.  This  seems  to  have 
been  the  characteristic  attitude  of  scientific  management  from  the 
beginning.  Labor  was  simply  looked  upon  as  one  of  the  factors 
entering  into  production,  like  machinery,  tools,  stores,  and  other 
elements  of  equipment.  The  problem  was  simply  how  to  secure  an 
efficient  coordination  and  functioning  of  these  elements.  It  was 
only  after  the  opposition  of  labor  had  been  expressed  that  scientific 
management  began  to  be  conscious  of  any  other  aspect  of  the  labor 
matter.  And  with  some  notable  exceptions  scientific  management  ex- 
perts and  employers  still  look  upon  the  labor  matter  almost  solely 
as  an  aspect  of  the  general  production  problem,  and  have  little  posi- 
tive interest  or  concern  in  regard  to  it  otherwise. 

It  is  probable  that  scientific  managers  will  object  to  these  state- 
ments, pleading  that  they  are  mainly  variations  and  conditions  due 
to  the  time  element  or  to  the  necessity  imposed  by  the  law  of  costs. 
They  will  say,  for  example,  that  when  a  new  and  unusual  job  comes 
in,  neither  time  nor  economy  will  allow  of  careful  time  studies,  and 
if  careful  studies  were  made  of  all  the  variations  of  a  complicated 


REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  139 


a 

s 


task,  the  expense  of  such  studies  would  wipe  out  the  profit;  that,  in 
general,  they  are  proceeding  toward  the  full  realization  of  the  ideal 
of  scientific  management  as  fast  as  economy  will  allow.  But  such 
pleas  would  serve  only  to  confirm  the  main  contention  that  scientific 
managers  and  scientific  management  employers  generally  are  neces- 
sarily ruled,  like  all  members  of  the  employing  group,  by  the  forces 
of  cost  and  profits;  that  to  them  the  labor  problem  is  primarily  an 
aspect  of  the  problem  of  production,  and  that  in  the  ends  the  needs 
and  welfare  of  labor  must  be  subordinated  to  these  things.  Beneath 
all  other  causes  or  shortcomings  of  scientific  management,  therefore, 
in  its  relation  to  labor,  there  seems1  to  be  the  practical  fact  of  an 
opposition  of  interests  between  the  profit-taking  and  the  labor  group, 
which  makes  extremely  doubtful  the  possibility  that  its  shortcomings 
from  the  standpoint  of  labor  are  capable  of  elimination. 

GENERAL   LABOR   PROBLEMS. 

6.  (a)  Scientific  management  at  its  best  furthers  the  modern  ten- 
dency toward  the  specialization  of  the  workers.  Its  most  essential 
features — functional  foremanship,  time  study,  task  setting,  and  effi- 
ciency payment — all  have  this  inherent  effect. 

Under  the  scientific  management  system  fully  developed,  the  ordi- 
nary mechanic  is  intended  to  be  and  is,  in  fact,  a  machine  feeder  and 
a  machine  feeder  only,  with  the  possibility  of  auxiliary  operations 
clearly  cut  off  and  with  means  applied  to  discourage  experimentation. 
And  what  applies  to  the  machine  feeder  applies  with  more  or  less 
thoroughness  to  machine  and  hand  operatives  generally. 

But  it  is  not  merely  in  stripping  from  the  job  its  auxiliary  opera- 
tions that  scientific  management  tends  to  specialize  the  work  and  the 
workmen.  Time  study,  the  chief  cornerstone  of  all  systems  of 
scientific  management,  tends  inherently  to  the  narrowing  of  the  job 
or  task  itself.  As  the  final  object  of  time  study,  so  far  as  it  directly 
touches  the  workers,  is  to  make  possible  the  setting  of  tasks  so  simple 
and  uniform  and  so  free  from  possible  causes  of  interruption  and 
variation  that  definite  and  invariable  time  limits  can  be  placed  upon 
them,  and  that  the  worker  may  be  unimpeded  in  his  efficient  per- 
formance of  them  by  the  necessity  for  questioning  and  deliberation, 
the  preponderating  tendency  of  time  study  is  to  split  up  the  work 
into  smaller  and  simpler  operations  and  tasks.  Decidedly,  then, 
time  study  tends  to  further  the  modern  tendency  toward  specializa- 
tion of  the  job  and  the  task. 

With  functional  foremanship  lopping  off  from  the  job  auxiliary 
operations,  and  time  study  tending  to  a  narrowing  of  the  task  itself, 
task  setting  and  efficiency  methods  of  payment  come  into  play  as 
forces  tending  to  confine  the  worker  to  a  single  task  or  a  narrow 
range  of  operations.  The  worker  is  put  upon  the  special  task  for 
which  he  seems  best  adapted,  and  he  is  stimulated  by  the  methods  of 
payment  employed  to  make  himself  as  proficient  as  possible  at  it. 
When  he  succeeds  in  this,  to  shift  him  to  another  task  ordinarily  in- 
volves an  immediate  and  distinct  loss  to  the  employer,  and  the  worker 
himself  naturally  resents  being  shifted  to  a  new  task  since  this  in- 
volves an  immediate  loss  in  his  earnings.  Here  worker  and  em- 
ployer are  as  one  in  their  immediate  interest  to  have  the  job  so 


140  REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

simple  that  the  operation  can  be  quickly  learned,  and  the  task  made, 
and,  that  shifting  of  tasks  be  eliminated  as  far  as  possible.  The 
employer  besides  has  another  motive  for  this,  in  that  the  shifting  of 
the  workers  multiplies  the  records  and  renders  more  complex  the 
system  of  wage  accounting.  It  is  true  that  the  scientific  manage- 
ment employer,  like  any  other,  must  have  a  certain  number  of  workers 
in  the  shop  who  are  capable  of  performing  a  plurality  of  tasks.  But 
the  tendency  is  to  have  as  few  all-round  workers  as  are  necessary  to 
meet  these  emergencies.  The  methods  of  scientific  management 
operate  most  effectively  when  they  break  up  and  narrow  the  work  of 
the  individual,  and  'the  ends  of  scientific  management  are  best  served 
when  the  rank  and  file  of  the  workers  are  specialists. 

This  inherent  tendency  of  scientific  management  to  specialization 
is  buttressed,  broadened  in  its  scope  and  perpetuated  by  the  pro- 
gressive gathering  up  and  systematizing  in  the  hands  of  the  employ- 
ers of  all  the  traditional  craft  knowledge  in  the  possession  of  the 
workers.  With  this  information  in  hand  and  functional  foreman- 
ship  to  direct  its  use,  scientific  management  claims  to  have  no  need 
of  craftsmen,  in  the  old  sense  of  the  term,  and,  therefore,  no  need  for 
an  apprenticeship  system  except  for  the  training  of  functional  fore- 
men. It  therefore  tends  to  neglect  apprenticeship  except  for  the 
training  of  the  few.  And  as  this  body  of  systematized  knowledge  in 
the  hands  of  the  employer  grows,  it  is  enabled  to  broaden  the  scope 
of  its  operation,  to  attack  and  specialize  new  operations,  new  crafts 
and  new  industries,  so  that  the  tendency  is  to  reduce  more  and  more 
to  simple,  specialized  operations,  and  more  and  more  workers  to  the 
positions  of  narrow  specialists.  Nor  does  scientific  management 
afford  anything  in  itself  to  check  or  offset  this  specialization  ten- 
dency. The  instruction  and  training  offered  is  for  specialist  work- 
men. Selection  and  adaptation  are  specializing  in  their  tendencies. 
Promotion  is  for  the  relatively  few.  The  whole  system,  in  its  con- 
ception and  operation,  is  pointed  toward  a  universally  specialized 
industrial  regime. 

(&)  But  scientific  management  is  not  only  inherently  specializing; 
it  also  tends  to  break  down  existing  standards  and  uniformities  set 
up  by  the  workmen,  and  to  prevent  the  establishment  of  stable  con- 
ditions of  work  and  pay.  Time  study  means  constant  and  endless 
change  in  the  method  of  operation.  No  sooner  is  a  new  and  better 
method  discovered  and  established  and  the  condition  of  work  and 
pay  adapted  to  it  than  an  improvement  is  discovered  involving  per- 
haps new  machinery,  new  tools  and  materials,  a  new  way  of  doing 
things,  and  a  consequent  alteration  of  the  essential  conditions  of 
work  and  pay,  and  perhaps  a  reclassification  of  the  workers. 

(c)  Ample  evidence  to  support  this  analysis  was  afforded  by  the 
investigation.  Where  the  system  was  found  relatively  completely 
applied,  the  mass  of  the  workers  were  engaged  in  specialized  tasks, 
there  was  little  variation  in  the  operations  except  in  emergencies, 
apprenticeship  for  the  many  was  abandoned  or  was  looked  upon  as 
an  investment  which  brought  no  adequate  returns  and  was  slated 
for  abandonment;  almost  everywhere  scientific  management  em- 
ployers expressed  a  strong  preference  for  specialist  workmen,  old 
crafts  wrere  being  broken  up  and  the  craftsmen  given  the  choice  of 
retirement  or  of  entering  the  ranks  of  specialized  workmen;  in  the 
most  progressive  shops,  the  time  study  men  were  preparing  the  way 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  141 


__r  a  broader  application  of  the  system  by  the  analytical  study  of 
the  operations  and  crafts  not  yet  systematized.  Changes  in  methods 
and  classification  of  workers  were  seen  even  during  the  short  course 
of  the  investigation. 

(d)  What  does  this  mean  from  the  standpoint  of  labor  and  labor 
elf  are  ?    Certain  conclusions  are  inevitable.    Scientific  management, 

fully  and  properly  applied,  inevitably  tends  to  the  constant  break- 
down of  the  established  crafts  and  craftsmanship  and  the  constant 
elimination  of  skill  in  the  sense  of  narrowing  craft  knowledge  and 
workmanship  except  for  the  lower  orders  of  workmen.  Some  scien- 
tific management  employers  have  asserted  belief  in  their  ability  to 
get  on  a  paying  basis  within  three  months,  should  they  lose  their 
whole  working  force  except  the  managerial  staff  and  enough  others 
>  maintain  the  organization,  if  they  had  to  begin  all  over  again 
"th  green  hands.  What  this  means  in  increased  competition  of 
rkmen  with  workmen  can  be  imagined.  Were  the  scientific  man- 
ment  ideal  fully  realized,  any  man  who  walks  the  street  would  be 
a  practical  competitor  for  almost  any  workman's  job. 

Such  a  situation  would  inevitably  break  clown  the  basis  of  present- 
day  unionism  and  render  collective  bargaining  impossible  in  any  ef- 
fective sense  in  regard  to  the  matters  considered  by  the  unions  most 
essential.  It  has  been  proved  by  experience  that  unskilled  workers 
generally  find  it  most  difficult  to  maintain  effective  and  continuous 
organization  for  dealing  with  complicated  industrial  situations.  Ef- 
fective collective  bargaining  can  not  exist  without  effective  organi- 
zation. Moreover,  we  have  already  seen  how  scientific  management, 
apart  from  the  matter  of  skill,  tends  to  prevent  the  formation  and 

Jeakens  the  solidarity  of  groups  within  the  shops. 
But,  beyond  all  this,  time  study  strikes  at  the  heart  and  core  of  the 
principles  and  conditions  which  make  effective  unionism  and  collec- 
tive bargaining  possible  with  respect  to  certain  most  essential  mat- 
ters. When  the  employer  can  constantly  initiate  new  methods  and 
conditions  and  reclassify  the  work  and  the  workmen,  he  can  evade 
all  efforts  of  the  union  to  establish  and  maintain  definite  and  con- 
tinuous standards  of  work  and  pay.  Time  study  is  in  definite  oppo- 
sition to  uniformity  and  stable  classification.  It  enables  the  employer 
constantly  to  lop  off  portions  of  the  work  from  a  certain  class  and 
then  to  create  new  classifications  of  workers,  with  new  conditions  of 
work  and  pay.  Add  to  all  of -this  the  advantage  gained  by  the  em- 
ployers in  the  progressive  gathering  up  and  systematization  of  craft 
knowledge  for  their  own  uses,  and  the  destruction  of  apprenticeship, 
which  cuts  the  workers  off  from  the  perpetuation  among  them  of 
craftsmanship,  and  the  destructive  tendencies  of ^  scientific^  manage- 
ment as  far. as  present-day  unionism  and  collective  bargaining  are 
concerned,  seems  inevitable. 

(e)  Under  these  circumstances  the  progressive  degeneration  of 
craftsmanship  and  the  progressive  degradation  of  skilled  craftsmen 
also  seems  inevitable. 

(/)  The  ultimate  effects  of  scientific  management,  should  it  be- 
come universal,  upon  wages,  employment,  and  industrial  peace,  are 
matters  of  pure  speculation.  During  the  period  of  transition,  how- 
ever, there  can  be  little  doubt  of  the  results.  The  tendency  will  be 
first  toward  a  realignment  of  wage  rates.  The  craftsmen,  the  highly 
trained  workers,  can  not  hope  to  maintain  their  wage  advantage  over 


142  KEPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

the  semiskilled  and  less  skilled  workers.  There  will  be  a  leveling 
tendency.  Whether  this  leveling  will  be  up  or  down,  it  is  impossible 
to  say.  At  present  scientific  management  seems  to  be  making  the 
relatively  unskilled  more  efficient  than  ever  before,  and  they  are  in 
general  receiving  under  it  greater  earnings  than  ever  before.  It  is 
evident,  however,  that  the  native  efficiency  of  the  working  class  must 
suffer  from  the  neglect  of  apprenticeship.  Scientific  managers  have 
themselves  complained  bitterly  of  the  poor  material  from  which  they 
must  recruit  their  workers,  compared  with  the  efficient  and  self- 
respecting  craftsman  who  applied  for  employment  20  years  ago. 

Moreover,  it  must  not  be  overlooked  that  the  whole  scheme  of 
scientific  management,  and  especially  the  gathering  up  and  systema- 
tizing of  the  knowledge  formerly  the  possession  of  the  workmen, 
tends  enormously  to  add  to  the  strength  of  capitalism.  This  fact, 
together  with  the  greater  ease  of  displacement  shown  above,  must 
make  the  security  and  continuity  of  employment  inherently  more 
uncertain. 

If  generally  increased  efficiency  is  the  result  of  scientific  manage- 
ment, unemployment  w^ould  in  the  end  seem  to  become  less  of  a 
menace.  But  during  the  period  of  transition  its  increase  should  be 
expected.  Not  only  must  the  old  craftsmen  suffer  as  the  result  of 
the  destruction  of  their  crafts,  but  until  scientific  management  finds 
itself  able  to  control  markets  its  increased  efficiency  must  result  in 
gluts  in  special  lines,  with  resulting  unemployment  in  particular 
trades  and  occupations.  A  leading  scientific-management  expert 
has  stated  that  one  shop  of  six  in  a  certain  industry  systematized  by 
him  could  turn  out  all  the  product  that  the  market  would  carry. 
The  result  to  the  workers,  if  the  statement  be  true,  needs  no  explana- 
tion. Scientific  management  would  seem  to  offer  possibilities  ulti- 
mately of  better  market  control  or  better  adaptation  to  market  condi- 
tions, but  the  experience  of  the  past  year  of  depression  indicates  that 
at  present  no  such  possibilities  generally  exist. 

Finally,  until  unionism  as  it  exists  has  been  done  away  with  or 
has  undergone  essential  modification,  scientific  management  can  not 
be  said  to  make  for  the  avoidance  of  strikes  and  the  establishment 
of  industrial  peace.  The  investigation,  has  shown  several  well-authen- 
ticated cases  of  strikes  which  have  occurred  in  scientific-management 
shops.  They  are  perhaps  less  frequent  in  this  class  of  shop  than 
elsewhere  in  similar  establishments,  owing  largely  to  the  fact  that 
organized  workmen  are  on  the  whole  little  employed.  In  its  exten- 
sion, however,  it  is  certain  that  scientific  management  is  a  constant 
menace  to  industrial  peace.  So  long  as  present-day  unionism  exists 
and  unionists  continue  to  believe,  as  they  seem  warranted  in  doing, 
that  scientific  management  means  the  destruction  of  their  organiza- 
tions or  their  present  rules  and  regulations,  unionism  will  continue 
to  oppose  it  energetically  and  whenever  and  wherever  opportunity 
affords. 

It  has  been  said  with  much  truth  that  scientific  management  is 
like  the  invention  of  machinery  in  its  effect  upon  workers  and  social 
conditions  and  welfare  generally — that  it  gives  a  new  impulse  to 
the  industrial  revolution  which  characterized  the  latter  part  of  the 
eighteenth  and  nineteenth  centuries  and  strengthens  its  general 
effects  and  tendencies.  A  chief  characterization  of  this  revolution 
has  been  the  breakdown  of  craftsmanship,  the  destruction  of  crafts, 


BEPOBT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS.  143 


and  the  carrying  of  the  modern  industrial  world  toward  an  era  of 
specialized  workmanship  and  generally  semiskilled  or  unskilled 
workmen.  Scientific  management  seems  to  be  another  force  urging 
us  forward  toward  this  era. 


CONCLUSIONS. 


1\  Our  industries  should  adopt  all  methods  which  replace  inac- 
•acy  with  accurate  knowledge  and  which  systematically  operate  to 
ninate  economic  waste.  Scientific  management  at  its  best  has  suc- 
ded  in  creating  an  organic  whole  of  the  several  departments  of 
institution,  establishing  a  coordination  of  their  functions  which 
lias  previously  been  impossible,  and,  in  this  respect,  it  has  conferred 
great  benefits  on  industry. 

The  social  problem  created  by  scientific  management,  however, 
does  not  lie  in  this  field.  As  regards  its  social  consequences  neither 
organized  nor  unorganized  labor  finds  in  scientific  management  any 
adequate  protection  to  its  standards  of  living,  any  progressive  means 
for  industrial  education,  any  opportunity  for  industrial  democracy 
by  which  labor  may  create  for  itself  a  progressively  efficient  share 
in  management.  Therefore,  as  unorganized  labor  is  totally  un- 
equipped to  work  for  these  human  rights,  it  becomes  doubly  the  duty 
of  organized  labor  to  work  unceasingly  and  unswervingly  for  them, 
and,  if  necessary,  to  combat  an  industrial  development  which  not  only 
does  not  contain  conditions  favorable  to"  their  growth,  but,  in  many 
respects,  is  hostile  soil. 

XIX.     PRISON  LABOR. 

The  evidence  which  has  come  before  the  commission  is  the  basis 
for  the  following  statements : 

1.  The  practice  of  using  convicts  in  penitentiaries  and  prisons 
generally  for  the  manufacture  of  articles  for  general  commerce  has 
been  productive  of  evil  results  as  regards  not  only  the  convicts  but 
the  general  public. 

2.  The  competition  of  prison-made  articles  has  resulted  in  the 
existence  of  a  low  wage  scale  in  many  industries  and  has  subjected 
the  manufacturers  to  a  kind  of  competition  which  should  not  exist 
in  any  civilized  community. 

3.  The  only  beneficiaries  of  the  convict  labor  system  are  the  con- 
tractors who  are  permitted  by  the  State  to  exploit  the  inmates  of 
prisons. 

4.  The  individual  States  are  powerless  to  deal  adequately  with 
this  situation  because  of  the  interstate  shipment  of  convict-made 
goods. 

It  is  suggested  that  the  commission  recommend : 

1.  The  abolition  as  far  as  possible  of  indoor  manufacture,  and  the 
substitution  of  such  outdoor  work  as  that  upon  State  farms  and 
State   roads,   providing  that  where   prisoners   are  employed   they 
should  be  compensated  and  that  the  products  which  they  manufac- 
ture should  not  be  sold  in  competition  with  the  products  of  free 
labor. 

2.  The  enactment  by  Congress  of  a  bill  providing  that  all  convict- 
made  goods  when  transported  into  any  State  or  Territory  of  the 
United  States  shall  be  subject  to  the  operation  of  the  laws  of  such 


144  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

State  or  Territory  to  the  same  extent  and  in  the  same  manner  as 
though  such  goods  had  been  produced  therein. 

XX.     IMMIGRATION. 

The  evidence  presented  to  the  commission  is  the  basis  for  the  fol- 
lowing statements : 

1.  The  immigration  policy  of  the  United  States  has  created  a 
number  of  our  most  difficult  and  serious  industrial  problems  and  has 
been  responsible  in  a  considerable  measure  for  the  existing  state  of 
industrial  unrest. 

2.  The  enormous  influx  of  immigrants  during  the  past  25  years 
has  already  undermined  the  American  standard  of  living  for  all 
workmen  except  those  in  the  skilled  trades,  and  has  been  the  largest 
single  factor  in  preventing  the  wage  scale  from  rising  as  rapidly  as 
food  prices. 

3.  The  great  mass  of  non-English-speaking  workers,  who  form 
about  one-half  of  the  labor  force  in  the  basic  industries,  has  done 
much  to  prevent  the  development  of  better  relations  between  em- 
ployers and  employees. 

4.  The  presence  of  such  a  large  proportion  of  immigrants  has 
greatly  hampered  the  formation  of  trade-unions  and  has  tremen- 
dously increased  the  problem  of  securing  effective  and  responsible 
organizations. 

5.  The  unreasonable  prejudice  of  almost  every  class  of  Americans 
toward  the  immigrants,  who  form  such  a  large  proportion  of  the 
labor  force  of  our  industries,  has  been  largely  responsible  for  the 
failure  of  our  Nation  to  reach  a  correct  understanding  of  the  labor 
problem  and  has  promoted  the  harshness  and  brutality  which  has  so 
often  been  manifested  in  connection  with  industrial  disturbances. 
It  has  been  and  to  a  large  measure  still  is  felt  possible  to  dismiss  the 
most  revolting  working  conditions,  the  most  brutal  treatment,  or 
the  most  criminal  invasions  of  personal  rights,  by  saying,  "  Oh,  well, 
they  are  just  ignorant  foreigners." 

6.  If  immigration  had  continued  at  the  average  rate  of  the  past 
10  years  it  would  have  proved  almost,  if  not  quite,  impossible  to  have 
brought  industrial  conditions  and  relations  to  any  proper  basis,  in 
spite  of  the  most  extreme  efforts  of  civic  organizations,  trades-unions, 
and  governmental  machinery.    The  great  diminution  of  immigration 
as  a  result  of  the  European  war  has  already  begun  to  show  its 
salutary  effects. 

It  is  suggested  that  the  commission  recommend : 

1.  The  enactment  of  legislation  providing  for  the  restriction  of  im- 
migration based  upon  the  general  provisions  contained  in  the  so- 
called  Burnett-Dillingham  bill,  which  has  received  the  approval  of 
two  successive  Congresses.  With  a  full  realization  of  the  many 
theoretical  objections  which  have  been  urged  against  the  literacy 
test,  the  consensus  of  evidence  is  so  strong  that  its  practical  work- 
ings would  be  to  restrict  immigration  to  those  who  are  likely  to 
make  the  most  desirable  citizens,  to  regulate  immigration  in  some 
degree  in  proportion  to  the  actual  needs  of  American  industry,  and 
finally  to  promote  education  in  Europe,  that  it  seems  necessary  at 
least  to  urge  that  this  plan  be  given  a  practical  test. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  145 


12.  The  enactment  of  legislation  providing  that  within  six  months 
om  the  time  of  entry   all  immigrants  shall  be  required,  under 
penalty  of  deportation,  either  to  declare  their  intention  to  become 

C*  'izens  by  taking  out  their  first  papers  or  to  definitely  register  them- 
ves  with  the  proper  authority  as  alien  tourists,  and  further  pro- 
ling  that  all  immigrants  wyho  have  failed  to  take  out  their  first 
pers  at  the  end  of  two  years  shall  be  deported,  as  shall  all  who 
il  to  take  out  their  second  papers  when  they  become  eligible,  de- 
portation in  each  case  to  act  as  a  bar  to  future  entry. 

3.  The  provision  by  the  States  and  municipalities,  with  the  assist- 
ance of  the  Federal  Government,  if  necessary,  for  the  education  of 
all  adult  persons  who  are  unable  to  speak,  read,  or  write  the  English 

tnguage.  In  order  to  accomplish  this  it  may  be  necessary  to  pro- 
de  that  employers  shall  grant  certain  definite  periods  of  leisure 
r  such  instruction. 


XXI.  LABOR  CONDITIONS  IN  AMERICAN  COLONIAL  POSSESSIONS. 


The  attention  of  the  commission  was  directed  to  the  labor  condi- 
tions in  American  colonies  by  the  strike  of  some  20,000  agricultural 
laborers  in  the  island  of  Porto  Rico,  and  by  the  appeal  of  the  repre- 
sentatives of  the  Free  Federation  of  Labor  of  Porto  Rico  for  a  hear- 
ing at  which  they  might  present  their  statement  of  the  labor  condi- 
tions, relations  between  laborers  and  employers,  and  the  attitude 
assumed  by  the  local  Government  during  the  strike.  The  commission 
granted  the  hearing  and,  in  order  that  a  full  and  fair  presentation 
of  the  conditions  should  be  made,  invited  the  Government  of  Porto 
Rico  to  appoint  representatives  who  were  fully  acquainted  with  the 
situation.  As  a  result  of  the  hearing  of  the  testimony  of  these  wit- 
nesses, a  situation,  was  found  which  demands  immediate  attention 
in  order  that  widespread  and  deep-rooted  evils  should  be  eliminated. 
These  conditions  are  in  large  measure  an  inheritance  from  centuries 
of  despotic  Spanish  rule,  and  it  is  undeniable  that  great  improve- 
ments in  certain  lines  have  been  accomplished  under  American  ad- 
ministration. Nevertheless,  a  peculiar  responsibility  rests  upon  the 
American  Nation  for  the  conditions  of  the  people  in  our  colonial 
possessions  who  occupy  the  position  morally  and  legally  of  wrards  of 
the  Nation. 

The  investigations  were  confined  to  the  conditions  in  Porto  Rico, 
but  through  the  petitions  filed  with  the  commission  by  the  inhabi- 
tants of  other  islands  and  through  the  information  contained  in  re- 
ports of  governmental  officials,  it  seems  certain  that  the  labor  condi- 
tions in  all  American  colonies  are  generally  similar  to  those  in  Porto 
Rico,  and  demand  the  attention  of  Congress. 

As  a  result  of  the  investigations  and  a  careful  analysis  of  the 
extensive  documentary  evidence  filed,  the  following  statements  with 
regard  to  industrial  and  social  conditions  in  Porto  Rico  are  war- 
ranted : 

1.  Laborers  in  Porto  Rico,  including  men,  women,  and  children, 
are  employed  at  wages  which  are  inadequate  to  furnish  proper  food 
and  clothing.  The  wages  of  men  in  agricultural  districts  range  from 
35  to  60  cents  a  day,  when  employed,  and  those  of  the  women  and 
"  ildren  are  about  one-half  this  amount. 


38819°— 16 10 


146  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

2.  As  a  result  largely  of  the  low-wage  standard,  the  diet  of  the 
laborers,  consisting  chiefly  of  rice,  beans,  codfish,  and  plantains,  is 
so  miserably  inadequate  that  the  worker  not  only  is  rendered  ineffi- 
cient but  is  to  a  large  extent  undernourished. 

3.  The  laborers  are  further  exploited  on  the  large  plantations, 
according  to  the  testimony  of  the  Government  representatives,  by 
exorbitant  prices  for  food  and  other  supplies,  by  deliberate  cheating 
as  regards  weights  and  measures,  and  by  unwarranted  deductions 
from  their  wages  for  goods  that  were  never  purchased. 

4.  The  educational  facilities  of  Porto  Rico  are  so  totally  inade- 
quate that  there  are  nearly  200,000  children  for  whose  education  no 
provision  has  been  made. 

The  representatives  of  the  colonial  Government  give  a  lack  of 
ability  to  finance  the  educational  system  as  the  reason  for  the  present 
conditions. 

5.  Many  thousand  people  yearly,  located  in  the  rural  districts,  far 
from  medical  attendance  and  unable  to  afford  the  high  charges  of 
the  physicians,  die  without  medical  attendance. 

6.  The  labor  laws  of  Porto  Rico  are  inadequate,  and  the  Bureau 
of  Labor  is  not  provided  with  sufficient  funds  to  enforce  the  existing 
laws.    The  laws  supposed  to  regulate  the  labor  of  women  and  chil- 
dren are  generally  violated.     The  provisions  of  the  law  restraining 
child  labor  are  largely  nullified  by  the  insertion  of  a  clause  which 
permits  this  labor  if  the  child  is  accompanied  by  a  parent  or  other 
relative. 

The  employers'  liability  law  of  the  island  has  the  archaic  fellow - 
servant  clause  in  it  and  therefore  is  noneffective. 

7.  The  great  majority  of  the  Porto  Ricans  are  landless,  the  land 
of  Porto  Rico  being  largely  owned  by  the  corporations,  wealthy 
landlords,  and  the  colonial  Government  and  municipalities.     Very 
little  land  is  for  sale. 

8.  As  a  result,  the  land  rents  are  inordinately  high  and  tend  very 
strongly  to  retard  the  development  of  a  middle  class. 

9.  The  housing  conditions  of  the  workers  are  extremely  bad.    The 
majority  of  the  rural  workers  live  in  huts  which  do  not  cost  more 
than  $10  to  build,  and  these  huts  are  occupied,  on  an  average,  by  five 
people  each,  although  at  best  there  are  only  semipartitions  dividing 
the  huts  into  two  rooms.    The  existing  conditions  are  a  menace  not 
only  to  health  but  to  morality  and  every  sense  of  decency. 

10.  The  laborers  may  be  ejected  from  the  huts  provided  by  the 
employers  at  any  time  that  the  owner  sees  fit,  and,  while  they  pay  no 
rent,  they  must  and  do  work  for  the  owner  at  his  pleasure. 

11.  In  the  cities  the  conditions  are  almost  equally  bad.     The  city 
laborers  rent  apartments  or  build  little  houses  on  rented  land.     As 
an  illustration  of  this  condition :  There  were,  in  1912,  10,936  people 
in  Puerto  de  Tierra.    These  people  lived  in  1,144  houses,  and  practi- 
cally 98  per  cent  of  them  were  renters,  as  the  occupants  of  only  30 
houses  owned  both  house  and  land.    The  land  of  one  owner,  which 
was  assessed  at  $6,340,  brought  in  a  total  rent  of  $2,580,  or  37.4  per 
cent.    That  of  another,  assessed  at  $29,460,  yielded  $7,821  in  rent,  or 
23.9  per  cent. 

12.  Unemployment  is  very  prevalent  in  the  island,  and  it  has  been 
testified  that,  largely  as  the  result  of  stimulated  immigration,  there 
are  between  200,000  and  300,000  more  workers  than  jobs. 


I 


EEPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS.  147 


:; 


13.  The  immigrants  from  the  English-speaking  islands  or  from 
the  mainland  are  given  preference  over  the  native  Porto  Ricans,  who 
speak  Spanish.  This  has  resulted  in  much  hardship  to  the  natives. 
11.  The  strike  of  agricultural  laborers  and  other  workers  which 
;-an  in  January,  1915,  was  not  only  justified  but  was  in  the  interests 
the  progress  of  the  island.  The  long  hours,  low  wages,  and  ex- 
oitation  of  the  laborers  .could  not  have  been  relieved  except  by  their 
ganized  action.  This  is  in  accord  with  the  testimony  of  the  Govern- 
nt  representatives. 

15.  These  laborers,  hitherto  unorganized,  excitable,  and  filled  with 
sense  of  the  grievous  wrongs  which  they  and  their  families  had 
ffered,  were  poorly  disciplined  and  may  have  been  guilty  of  excesses 
speech  and  action,  although  there  is  much  evidence  to  indicate  that 

ey  were  peaceful  and  law-abiding  until  provoked  by  the  agents  of 
e  employers  or  by  the  police. 

16.  Whatever  may  have  been  the  actions  of  the  strikers,  however, 
there  can  be  no  excuse  for  the  actions  of  the  police  and  municipal 
authorities,  who  violated  the  personal  rights  of  the  strikers,  treated 

em  in  many  cases  with  wanton  brutality,  resulting  in  the  death  of 

rge  numbers,  held  them  in  excessive  bail,  denied  them  access  to  the 
ordinary  processes  of  the  courts,  and  inflicted  excessive  and  unwar- 
ranted punishments  upon  them. 

IT.  The  blame  for  such  conditions  appears  to  rest  primarily  upon 

e  rural  police  and  local  magistrates. 

18.  The  demands  for  legislation  made  by  the  representatives  of  the 

ree  Federation  of  Labor  of  Porto  Rico  appear  to  be  wise  and 
reasonable,  but  without  an  opportunity  for  full  local  investigation  it 
is  impossible  to  fully  indorse  them. 

It  is  suggested  that  the  commission  recommend  provision  by  Con- 
gress for  early  and  thorough  investigation  of  the  industrial  and 

ial  conditions  in  Porto  Rico  and  all  other  American  colonies. 


soc 


XXII.  CHINESE  EXCLUSION. 


The  investigations  with  reference  to  that  section  of  the  act  which 
directed  the  commission  to  inquire  "  into  the  question  of  smuggling 
or  other  illegal  entry  of  Asiatics  into  the  United  States  or  its  insular 
possessions "  were  made  largely  under  the  direction  of  Mr.  E.  A. 
Fitzpatrick  and  Mr.  E.  H.  Busiek.  The  extensive  evidence  collected 
regarding  this  entire  question  is  contained  in  the  report  of  Mr.  Fitz- 
patrick, which  is  submitted  herewith. 

The  constructive  suggestions  and  recommendations  which  have 
been  approved  by  the  special  subcommittee  on  Chinese  exclusion,  con- 
sisting of  Chairman  Frank  P.  Walsh  and  Commissioners  Harris 
Weinstock  and  James  O'Connell,  and  accepted  by  the  entire  commis- 
sion, with  reservations  as  to  the  agency  of  administration,  are  as 
follows : 

CONSTRUCTIVE  SUGGESTIONS. 

CHANGES  IN  THE  £AW. 

The  following  changes  should  be  made  in  the  law  in  the  interest  of 
administrative  efficiency : 

1.  That  the  many  laws  relating  to  the  exclusion  of  Chinese  be 
codified  into  a  comprehensive  statute. 


148  EEPOKT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

2.  That  Chinese  alleged  to  have  entered  the  United  States  sur- 
reptitiously shall  be  tried  by  administrative  process,  i.  e.,  on  Secre- 
tary of  Labor's  warrant — in  all  cases  irrespective  of  time  of  entry 
or  defense  of  citizenship.1    At  the  present  time  only  Chinese  alleged 
to  have  entered  within  three  years  may  be  tried  on  Secretary's  war- 
rant. 

3.  That  immigration  officers  be  specifically  given  the  power  of 
arrest  or  taking  into  custody. 

4.  That  immigration  officers  be  given  the  right  to  administer  bind- 
ing oaths  in  all  cases  arising  under  the  immigration  law. 

5.  That  immigration  officials  be  given  the  power  to  compel  attend- 
ance of  witnesses  and  the  production  of  documentary  or  other  evi- 
dence in  all  cases  providing  for  punishment  for  contempt. 

6.  That  the  attacking  of  an  immigration  official  or  interference 
with  him  in  the  performance  of  his  duties,  or  any  maltreatment  of 
him  growling  out  of  the  performance  of  his  duties,  should  be  made 
a  penal  offense. 

7.  That  the  place  of  deportation  to  which  contraband  Chinamen 
shall  be  sent  may  be,  in  the  discretion  of  the  Secretary  of  Labor,  the 
country  whence  he  came,  or  the  country  of  his  citizenship,  or  the 
trans- Atlantic  or  trans-Pacific  port  from  which  he  embarked  for  this 
continent 

8.  That  there  be  a  clearer  and  more  definite  legislative  definition 
of  the  exempt  and  of  the  admitted  classes. 

9.  That  there  be  a  clearer  definition  of  legislative  policy  as  to  the 
status  under  the  immigration  and  Chinese-exclusion  law  of  China- 
men admitted  as  exempts  and  subsequently  assuming  a  nonexempt 
status. 

10.  That  the  pecuniary  and  family  conditions  for  the  return  of 
Chinese  laborers  in  the  United  States  to  China  be  repealed. 

11.  That  the  recommendation  of  a  new  registration  because  it  is 
needed  to  enforce  the  ^resent  law  be  rejected.     This  must  not  be 
understood  to  mean  a  rejection  of  a  new  registration  law  as  a  part  of 
legislative  policy,  but  solely  when  it  is  urged  for  administrative 
reasons. 

12.  That  masters  of  vessels  be  responsible  for  every  Chinese  mem- 
ber of  their  crew  who  was  on  board  the  vessel  when  it  enters  and  is 
not  on  board  when  it  is  ready  for  clearance. 

1  The  anomalous  citizenship  situation. — A  Chinese  person  can  not  become  a  citizen  by 
naturalization.  The  child  of  a  Chinese  alien  man  and  woman,  who  themselves  could 
never  become  citizens,  would  be,  if  born  in  the  United  States,  an  American  citizen.  The 
fact  that  the  parents  never  intend  that  the  child  should  be  an  American  citizen,  and  the 
child  itself  even  when  grown  up  never  regards  himself  as  an  American  citizen  except  for 
purposes  of  the  Chinese  exclusion  law,  does  not  enter  into  the  matter.  The  child  of  an 
American  citizen  born  on  foreign  soil — China  or  elsewhere — is  an  American  citizen. 

Chinese  arrested  for  being  unlawfully  in  the  United  States  set  up  the  claim  of  nativity. 
This  claim  is  in  many  cases  fraudulent.  The  matter  is  easy.  A  Chinaman,  when  ar- 
rested, is  told  to  stand  mute,  or,  if  the  story  has  been  concocted,  he  tells  a  story  like 
this  :  "  I  was  born  in  San  Francisco  [or  in  some  rural  place,  where  there  are  no  records  of 
birth].  My  father  and  mother  returned  to  China  when  I  was  four  years  old.  I  remained 
with  my  clansman,  Mr.  Y-M-G,  who  has  since  returned  to  China  or  died.  For  the  past 
four  years  I  have  remained  with  my  uncle,  who  was  at  the  baptismal — shaving — feast, 
and  can  testify  to  these  facts."  Uncle  testifies.  United  States  commissioner  discharges 
the  Chinaman,  and  if  nativity  was  the  defense  the  citizenship  of  the  Chinaman  is  res 
judicata.  Thus  are  citizens  made.  ' 

A  rather  dangerous  situation  is  developing  in  this  connection.  In  one  large  city  of 
the  country  definite  efforts  are  being  made  to  vote  the  Chinaman  and  have  his  citizen- 
ship established  that  way.  This  of  ^necessity  brings  the  question  into  local  politics  and 
complicates  further  an  already  awkward  situation.  This  situation  ought  to  be  cleared 
up.  The  fundamental  change  required  is  an  amendment  to  the  Constitution. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  149 

UNITED   STATES    COMMISSIONERS. 


11.  That  the  jurisdiction  of  United  States  commissioners  in  Chi- 
ese-exclusion  cases  be  abolished,  or,  what  is  less  desirable.1 
2.  That  the  following  changes  in  the  system  be  made:   United 
Jtates  commissioners  should  receive  adequate  compensation  for  the 
service   rendered.      United    States   commissioners  should   be  "made 
courts  of  record  and  stenographic  and  other  expenses  provided  for. 
The  Government  should  be  given  right  of  appeal  in  Chinese  cases. 

THE   JUDICIAL    SYSTEM. 

1.  That  the  handling  of  cases  of  contraband  Chinamen  should  be 
andled  by  administrative  rather  than  by  judicial  procedure. 

2.  That  the  present  administrative  procedure  be  continued  prac- 
ically  without  modification,  except  for  the  improved  handling  of 
ppeals  as  recommended  elsewhere  in  these  suggestions. 

3.  That  writs  of  habeas  corpus  should  be  issued  only  on  the  basis 
of  a  prima  facie  case. 

4.  That  in  criminal  cases   (smuggling)    full  sentences  should  be 
imposed  instead  of  light  sentences  as  at  present. 

5.  That,  if  advisable,  the  cases  of  contraband  Chinamen  might  be 
held  under  the  board  of  special  inquiry  procedure  provided  for  in 
cases  of  immigrants  not  passed  upon  primary  inspection  for  admis- 
sion.   The  adoption  of  this  suggestion  would  necessitate  the  employ- 
ment of  a  considerable  number  of  additional  men,  and  for  this  reason 
ought  not  to  be  adopted  immediately. 


GENERAL  ADMINISTRATION. 


1.  Definitely  withdraw  the  order  of  1905. 

2.  By  conference  with   Treasury   Department  provide   for  more 
careful  sealing  and  supervision  of  sealed  freight  cars  crossing  the 
border — 

(a)  By  placing  seal  number  and  place  of  each  car  on  the  manifest. 

(b)  By  taking  number  and  place  of  each  seal  of  each  car  independ- 
ently and  testing  seal. 

I(c)   By  comparing  local  record  with  manifest  immediately. 
(d)  By  examination  of  contents  of  each  car  where  there  is  the 
east  discrepancy  or  suspicion. 


THE  SELECTION  OF  INSPECTORS. 


-- 


1.  That  the  position  of  Chinese  inspector  be  revived. 

2.  That  the  selection  of  Chinese  inspectors  by  civil-service  exami- 
nation for  general  immigrant  inspectors  be  continued. 

3.  That  the  present  examination  be  changed  in  scope  as  follows : 
(a)  That  all  papers  now  required  be  omitted  ercept  "  practical 

uestions." 


1  All  interests  would  be  best  served  by  an  administrative  rather  than  a  judicial  pro- 
cedure in  cases  of  contraband  Chinese.  As  usual,  writs  of  habeas  corpus  would  be  issued 
by  the  courts  in  case  of  arbitrary  action  or  of  jurisdiction  in  these  cases. 


150  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

(b)  That  greater  credit — larger  proportion  of  examination — be 
given  for  practical  experience  in  handling  the  public. 

(c)  That  new  examination  in  report  writing  be  given  to  include 
a  practical  test  in  condensation — material  to  relate  to  immigration, 
formulation  of  a  report  on  a  given  statement  of  fact,  letter  writing. 

(d)  That  the  examination  include  a  test  on  Canadian  immigration 
laws.  * 

(e)  That  it  include  a  test  of  knowledge  of  our  National  Govern- 
ment, particularly  of  those  departments  that  are  related  to  the  work 
of  immigration — 

Treasury  Department. 

Congress. 

The  judicial  system. 

Department  of  State. 

(/)  That,  if  possible,  an  oral  examination  be  included. 

(g)  That  the  examination  include  somewhere  questions  on  the 
relation  of  immigration  and  emigration  to  a  national  policy,  on 
immigration  as  an  internal  policy,  and  a  general  history  of  immi- 
gration. 

4.  That  the  examination  have  specific  reference  in  its  questions  to 
immigration  work  and  not  be  mere  general  tests. 

5.  That  Chinese  inspectors  be  selected  from  the  more  experienced 
immigrant  inspectors  who  show  an  inclination  and  ability  in  the 
special  requirements  of  this  end  of  the  service. 

6.  That  the  probationary  period  of  an  immigrant  inspector  be  one 
year. 

CHINESE  INTERPRETERS. 

1.  That  in  the  selection  of  interpreters  the  present  examination  be 
continued  except  that,  in  testing  ability  to  translate  or  interpret, 
actual  cases  be  taken  in  course  of  routine  work  rather  than  the  pres- 
ent moot  examination. 

2.  That  in  securing  candidates  for  positions  as  interpreters  the 
Immigration  Service  should  look  to  the  large  number  of  Chinese 
students  in  our  universities,  particularly  those  who  are  here  at  the  ex- 
pense of  the  United  States  Go  vernment  (the  Boxer  indemnity  money). 

3.  That  the  position  of  Chinese  interpreter  be  graded  into  two 
grades  at  least,  as  follows : 

(a)  Those  who  can  interpret  the  spoken  Chinese  of  one  or  more 
dialects. 

(&)  Those  who  can  in  addition  read  the  written  language. 

4.  That  the  salary  program  outlined  for  inspectors  be  adapted  to 
the  interpreters. 

5.  That  a  conference  be  arranged  by  the  various  departments  of 
Government  who  use  interpreters  of  Chinese  to  work  out  some  plan 
of  securing  honest,  capable  interpreters — perhaps  in  cooperation  with 
the  universities. 

A  STAFF  ORGANIZATION   AT  WASHINGTON. 

1.  That  there  be  established  at  Washington  a  staff  organization 
including  at  least — 

(a)  Another  Assistant  Secretary  of  Labor  to  handle  Chinese  ap- 
peal cases,  etc. 


EEPOKT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  151 


(b)  A  central  law  organization  providing  for  the  continuous  study 
of  the  legal  aspects  of  immigration. 

(c)  A  central  Chinese  smuggling  bureau,  reenforcing  district  ad- 
ministration in  its  attempt  to  deal  with  smuggling  gangs  and  other 
organized  smuggling. 

(d)  A  central  agency  of  training  and  inspection,  providing  for  the 
continuous  supervision  and  training  of  the  men  in  the  service. 

(e)  A  central  clearing  house  of  information  and  records. 

2.  That  it  be  specifically  made  a  function  of  the  division  of  super- 
vision and  training  to  keep  district  officers  informed  as  to — 

(a)  Significant  court  decisions  in  all  districts. 

(b)  Significant  discoveries  of  district  offices,  e.  g.,  the  Japanese 
(Korean)  passport  case. 

(c)  Effective  methods  of  handling  particular  situations,  e.  g.,  of 
commissioner  who  refuses  to  give  full  credence  to  preliminary  hear- 
ings before  immigrant  inspectors  by  bringing  contraband   China- 
men immediately  before  commissioner. 

(d)  Chinese  refused  papers  in  any  place. 

3.  That  this  organization  should  keep  field  officers  informed  as  to 
forward  steps  and  other  significant  developments. 


SALARY    PLAN. 


1.  That  the  service  be  regarded  for  salary  purposes  as  a  unit  rather 
than  as  23  individual  units. 

2.  That  the  administrative  officers  work  out  a  detailed  plan  of 
graded  salary  increases. 

3.  That  there  be  an  annual  increase  in  salary  of  a  definite  amount 
for  a  definite  number  of  years  of  service  upon  certification  of  meri- 
torious  service   during  the   preceding  year.     On   the  basis   of   an 
initial  salary  of  $1,380,  it  seems  to  us  there  ought  to  be  an  annual 
increase  of  at  least  $36  per  year  for  15  years,  making  a  maximum 
salary  of  $1,920.    The  specific  amounts  named  are  offered  as  sugges- 
tions. 

4.  That  positions  in  the  service  ought  to  be  graded  and  correspond- 
ingly higher  initial  salaries  provided  for  the  higher  grades.     The 
system  of  annual  increases,  perhaps  of  the  same  amount,  ought  to  bo 

Erovided  here.  A  larger  increase  for  a  less  number  of  years  might 
e  advisable.  It  should  be  provided  in  this  connection  that  a  man 
promoted  from  a  lower  to  a  higher  position,  if  he  is  receiving  a 
higher  salary  than  the  initial  salary  of  the  higher  position,  should 
receive  the  next  higher  salary  to  the  salary  he  is  receiving  in  the 
lower  position.  A  person  standing  in  a  little  house  watching  those 
who  come  across  an  international  bridge  in  Suspension  Falls,  another 
doing  primary  inspection  work  or  board  of  inquiry  work  at  Ellis 
Island,  another  working  "  under  cover  "  among  the  thugs  of  Buffalo 
and  being  beaten  into  insensibility,  another  doing  train  inspection 
work — would  receive  no  pay  because  of  differences  of  duties.  It  is 
submitted  that  some  recognition  of  this  difference  in  duties  ought  to 
find  expression  in  the  salary  schedule. 

5.  Superior  service  should  be  rewarded  both  by  formal  commenda- 
tion and  by  salary  increases.    Two  provisions  might  be  included : 

(a)  The  reward  for  a  single  brilliant  piece  of  work,  such  as  work- 
ing under  cover  with  smugglers,  risking  one's  life,  and  landing  the 
gang  in  jail. 


152  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

(5)   The  provision  of  a  higher  annual  increase  for  men  giving 
continuous  superior  service. 

REDISTRICTIXG. 

1.  That  there  be  a  redistricting  of  the  United  States  for  immigra- 
tion purposes  with  more  regard  to  geographical  facts  and  to  the 
efficiency  of  the  service. 

2.  That  district  offices  take  a  periodic  census  in  cooperation  with 
the  State  or  National  Census  or  ,both,  or,  if  necessary,  independent 
of  each.     (This  would  help  local  offices  to  really  see  their  problems. 
It  would  acquaint  them  with  their  constituency.) 

3.  That  this  census  be  kept  up  to  date  and  supplemented  by  coop- 
eration with  municipal  and  State  boards  of  health  and  bureaus  of 
vital  statistics  by  recording  currently — 

(a)  Chinese  births. 

(b)  Chinese  deaths. 

(c)  Chinese  marriages. 

4.  That  this  census  be  kept  up  to  date  and  supplemented  by  making 
part  of  the  record  all  the  examinations  of  Chinese  in  connection  with 
routine  and  other  investigations.    A  system  of  cross  reference  cards 
should  be  on  file  in  Washington.    It  should  be  kept  up  to  date  and 
supplemented  by  listing  removals  and  advising  as  far  as  possible  the 
district  to  which  the  Chinaman  moved. 

5.  That  the  force  should  be  increased  and  the  whole  group  of  in- 
spectors be  organized  for  regular  field  work.    This  should  take  the 
place  of  any  system  of  national  arrest  crews. 

6.  That  the  system  of  rewards  of  conductors,  trainmen,  and  police- 
men who  supply  information  leading  to  arrests  of  contraband  Chi- 
nese or  smugglers,  which  seems  now  in  abeyance,  be  revived  and  be 
provided  for  in  an  emergency  fund  for  each  district.     (Approval 
of  Washington  perhaps  should  be  required  in  each  case.) 

7.  That  a  business  and  occupation  census  of  each  district  accom- 
pany the  census  of  persons. 

8.  That  the  force  of  immigrant  inspectors  assigned  to  Chinese 
work  be  increased. 

9.  That  the  equipment  to  be  used  in  the  work  of  administering  the 
Chinese  exclusion  law  be  adequate  to  cope  with  the  smugglers. 

FRANK  P.  WALSH.* 
JOHN  B.  LENNON.* 
JAMES  O'CoNNELL.1 

AUSTIN   B.    GARRETSON.1 

1  See  supplemental  statement. 


! 


merit 
life^ 

T^ 


SUPPLEMENTAL  STATEMENT  OF  CHAIRMAN  FRANK  P.  WALSH. 

Charged  by  your  honorable  body  with  an  investigation  to  discover 
e  underlying  causes  of  dissatisfaction  in  the  industrial  situation, 
we  herewith  present  the  following  findings  and  conclusions,  and  we 
urge  for  them  the  most  earnest  consideration,  not  only  by  the  Con- 
ress,  but  by  the  people  of  the  Nation,  to  the  end  that  evils  which 
reaten  to  defeat  American  ideals  and  to  destroy  the  well-being  of 
e  Nation  may  be  generally  recognized  and  effectively  attacked. 

WE  FIND  THE  BASIC  CAUSE  OF  INDUSTRIAL  DISSATISFACTION  TO  BE  LOW 

WAGES  ;  OR,  STATED  IN  ANOTHER  WAY,  THE  FACT  THAT  THE  WORKERS  OF 
THE  NATION,  THROUGH  COMPULSORY  A.ND  OPPRESSIVE  METHODS,  LEGAL 
AND  ILLEGAL,  ARE  DENIED  THE  FULL  PRODUCT  OF  THEIR  TOIL. 

We  further  find,  that  unrest  among  the  workers  in  industry  has 
grown  to  proportions  that  already  menace  the  social  good  will  and 
the  peace  of  the  Nation.  Citizens  numbering  millions  smart  under  a 

Tnse  of  injustice  and  of  oppression,  born  of  the  conviction  that  the 
)portunity  is  denied  them   to  acquire   for  themselves   and  their 
families  that  degree  of  economic  well-being  necessary  for  the  en  joy - 

^  of  those  material  and  spiritual  satisfactions  which  alone  make 
fe  worth  living. 

Bitterness,  bred  of  unfilled  need  for  sufficient  food,  clothing,  and 
shelter  for  themselves  and  their  wives  and  children,  has  been  further 
nourished  in  the  hearts  of  these  millions  by  resentment  against  the 
arbitrary  power  that  enables  the  employer,  under  our  present  indus- 
trial system,  to  control  not  only  the  workman's  opportunity  to  earn 
his  bread,  but  ofttirnes,  through  the  exercise  of  this  power,  to  dictate 
his  social,  political,  and  moral  environments  By  thwarting  the 
human  passion  for  liberty  and  the  solicitude  of  the  husband  and 
father  for  his  own,  modern  industry  has  kindled  a  spirit  in  these  dis- 
satisfied millions  that  lies  deeper  and  springs  from  nobler  impulses 
than  physical  need  and  human  selfishness. 

Among  these  millions  and  their  leaders  we  have  encountered  a 
spirit  religious  in  its  fervor  and  in  its  willingness  to  sacrifice  for  a 
cause  held  sacred.  And  we  earnestly  submit  that  only  in  the  light  of 
this  spirit  can  the  aggressive  propaganda  of  the  discontented  be 
understood  and  judged. 

The  extent  and  depth  of  industrial  unrest  can  hardly  be  exag- 
gerated. State  and  national  conventions  of  labor  organizations, 
numbering  many  thousands  of  members,  have  cheered  the  names  of 
leaders  imprisoned  for  participation  in  a  campaign  of  violence,  con- 
ducted as  one  phase  of  a  conflict  with  organized  employers.  Thirty 
thousand  workers  in  a  single  strike  have  followed  the  leadership  of 
men  who  denounced  government  and  called  for  relentless  warfare 
on  organized  society.  Employers  from  coast  to  coast  have  created 
and  maintained  small  private  armies  of  armed  men  and  have  used 
these  forces  to  intimidate  and  suppress  their  striking  employees  by 

153 


154  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

deporting,  imprisoning,  assaulting,  or  killing  their  leaders.  Elabo- 
rate spy  systems  are  maintained  to  discover  and  forestall  the  move- 
ments of  the  enemy.  The  use  of  State  troops  in  policing  strikes  has 
bred  a  bitter  hostility  to  the  militia  system  among  members  of  labor 
organizations,  and  States  have  been  unable  to  enlist  wage  earners 
for  this  second  line  of  the  Nation's  defense.  Courts,  legislatures, 
and  governors  have  been  rightfully  accused  of  serving  employers  to 
the  defeat  of  justice,  and,  while  counter  charges  come  from  em- 
ployers and  their  agents,  with  almost  negligible  exceptions  it  is  the 
wage  earners  who  believe,  assert,  and  prove  that  the  very  institu- 
tions of  their  country  have  been  perverted  by  the  power  of  the  em- 
ployer. Prison  records  for  labor  leaders  have  become  badges  of 
honor  in  the  eyes  of  many  of  their  people,  and  great  mass  meetings 
throughout  the  Nation  cheer  denunciations  of  courts  and  court  de- 
cisions. 

To  the  support  of  the  militant  and  aggressive  propaganda  of  or- 
ganized labor  has  come,  within  recent  years,  a  small  but  rapidly  in- 
creasing host  of  ministers  of  the  gospel,  college  professors,  writers, 
journalists,  and  others  of  the  professional  classes,  distinguished  in 
many  instances  by  exceptional  talent  which  they  devote  to  agitation, 
with  no  hope  of  material  reward,  and  a  devotion  that  can  be  ex- 
plained only  in  the  light  of  the  fervid  religious  spirit  which  animates 
the  organized  industrial  unrest. 

We  find  the  unrest  here  described  to  be  but  the  latest  manifestation 
of  the  age-long  struggle  of  the  race  for  freedom  of  opportunity  for 
every  individual  to  live  his  life  to  its  highest  ends.  As  the  nobles 
of  England  wrung  their  independence  from  King  John,  and  as  the 
tradesmen  of  France  broke  through  the  ring  of  privilege  inclosing 
the  Three  Estates,  so  to-day  the  millions  who  serve  society  in  arduous 
labor  on  the  highways,  and  aloft  on  scaffoldings,  and  by  the  sides  of 
whirring  machines,  are  demanding  that  they,  too,  and  their  children 
shall  enjoy  all  of  the  blessings  that  justify  and  make  beautiful  this 
life. 

The  unrest  of  the  wage  earners  has  been  augmented  by  recent 
changes  and  developments  in  industry.  Chief  of  these  are  the  rapid 
and  universal  introduction  and  extension  of  machinery  of  production, 
by  which  unskilled  workers  may  be  substituted  for  the  skilled,  and 
an  equally  rapid  development  of  means  of  rapid  transportation  and 
communication,  by  which  private  capital  has  been  enabled  to  organize 
in  great  corporations  possessing  enormous  economic  power.  This 
tendency  toward  huge  corporations  and  large  factories  has  been  fur- 
thered by  the  necessity  of  employing  large  sums  of  capital  in  order 
to  purchase  and  install  expensive  machinery,  the  use  of  which  is 
practicable  only  when  production  is  conducted  on  a  large  scale. 
Work  formerly  done  at  home  or  in  small  neighborhood  shops  has 
been  transferred  to  great  factories  where  the  individual  worker  be- 
comes an  impersonal  element  under  the  control  of  impersonal  cor- 
porations, without  voice  in  determining  the  conditions  under  which 
he  works,  and  largely  without  interest  in  the  success  of  the  enterprise 
or  the  disposal  of  the  product.  Women  in  increasing  numbers  have 
followed  their  work  from  the  home  to  the  factory,  and  even  children 
have  been  enlisted. 

Now,  more  than  ever,  the  profits  of  great  industries  under  central- 
ized control  pour  into  the  coffers  of  stockholders  and  directors  who 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  155 


Iver  have  so  muck  as  visited  the  plants,  and  who  perform  no 
rvdce  in  return.  And  while  vast  inherited  fortunes,  representing 
zero  in  social  service  to  the  credit  of  their  possessors,  automatically 
treble  and  multiply  in  volume,  two-thirds  of  those  who  toil  from 

Kto  12  hours  a  day  receive  less  than  enough  to  support  themselves 
nd  their  families  in  decency  and  comfort.  From  childhood  to  the 
grave  they  dwell  in  the  shadow  of  a  fear  that  their  only  resource — 
their  opportunity  to  toil — will  be  taken  from  them,  through  acci- 
dent, illness,  the  caprice  of  a  foreman,  or  the  fortunes  of  industry. 
The  lives  of  their  babies  are  snuffed  out  by  bad  air  in  cheap  lodgings, 
and  the  lack  of  nourishment  and  care  which  they  can  not  buy. 
Fathers  and  husbands  die  or  are  maimed  in  accidents,  and  their 
families  receive  a  pittance,  or  succumb  in  mid-life  and  they  receive 

rthing. 

And  when  these  unfortunates  seek,  by  the  only  means  within  reach, 

better  their  lot  by  organizing  to  lift  themselves  from  helplessness 
some  measure  of  collective  power,  with  which  to  wring  living 
wages  from  their  employers,  they  find  too  often  arrayed  against 
them  not  only  the  massed  power  of  capital,  but  every  arm  of  the 
Government  that  was  created  to  enforce  guaranties  of  equality  and 
justice. 

We  find  that  many  entire  communities  exist  under  the  arbitrary 
economic  control  of  corporation  officials  charged  with  the  manage- 
ment of  an  industry  or  group  of  industries,  and  we  find  that  in  such 
communities  political  liberty  does  not  exist,  and  its  forms  are  hollow 
mockeries.  Give  to  the  employer  power  to  discharge  without  cause, 
to  grant  to  or  withhold  from  thousands  the  opportunity  to  earn 
bread,  and  the  liberties  of  such  a  community  lie  in  the  hollow  of  the 
employer's  hand.  Free  speech,  free  assembly,  and  a  free  press  may 
be  denied,  as  they  have  been  denied  time  and  again,  and  the  employ- 
er's agents  may  be  placed  in  public  office  to  do  his  bidding. 

In  larger  communities  where  espionage  becomes  impossible  the 
wage  earner  who  is  unsupported  by  a  collective  organization  may 
enjoy  freedom  of  expression  outside  the  workshop,  but  there  his 
freedom  ends.  And  it  is  a  freedom  more  apparent  than  real.  For 
the  house  he  lives  in,  the  food  he  eats,  the  clothing  he  wears,  the  en- 
vironment of  his  wife  and  children,  and  his  own  health  and  safety 
are  in  the  hands  of  the  employer,  through  the  arbitrary  power  which 
he  exercises  in  fixing  his  wages  and  working  conditions. 

The  social  responsibility  for  these  unfortunate  conditions  may  be 
fixed  with  reasonable  certainty.  The  responsibility,  and  such  blame 
as  attaches  thereto,  can  not  be  held  to  rest  upon  employers,  since  in 
the  maintenance  of  the  evils  of  low  wages,  long  hours,  and  bad 
factory  conditions,  and  in  their  attempts  to  gain  control  of  economic 
and  political  advantages  which  would  promote  their  interests,  they 
have  merely  followed  the  natural  bent  of  men  involved  in  the 
struggle  of  competitive  industry.  The  responsibility  for  the  condi- 
tions which  have  been  described  above  we  declare  rests  primarily 
upon  the  workers  who,  blind  to  their  collective  strength  and  often- 
times deaf  to  the  cries  of  their  fellows,  have  suffered  exploitation 
and  the  invasion  of  their  most  sacred  rights  without  resistance.  A 
large  measure  of  responsibility  must,  however,  attach  to  the  great 
mass  of  citizens  who,  though  not  directly  involved  in  the  struggle 


156  REPORT  OF   COMMISSION   OX   INDUSTRIAL   RELATIONS. 

between  capital  and  labor,  have  failed  to  realize  that  their  own  pros- 
perity is  dependent  upon  the  welfare  of  all  classes  of  the  community, 
and  that  their  rights  are  bound  up  with  the  rights  of  every  other 
individual.  But,  until  the  workers  themselves  realize  their  respon- 
sibility and  utilize  to  the  full  their  collective  power,  no  action, 
whether  governmental  or  altruistic,  can  work  any  genuine  and  last- 
ing improvement. 

Fourteen  years  before  Abraham  Lincoln  was  called  to  the  high 
office  where  he  immortalized  his  name,  he  uttered  these  great  truths : 

Inasmuch  as  most  good  things  are  produced  by  labor,  it  follows  that  all 
such  things  of  right  belong  to  those  whose  labor  has  produced  them.  But  it  has 
so  happened  in  all  ages  of  the  world  that  some  have  labored  and  others  have 
without  labor  enjoyed  a  large  proportion  of  the  fruits.  This  is  wrong  and 
should  not  continue.  To  secure  to  each  laborer  the  whole  product  of  his  labor, 
or  as  nearly  as  possible,  is  a  worthy  subject  of  any  good  Government. 

With  this  lofty  ideal  for  a  goal,  under  the  sublime  leadership  of 
the  deathless  Lincoln,  we  call  upon  our  citizenship,  regardless  of 
politics  or  economic  conditions,  to  use  every  means  of  agitation,  all 
avenues  of  education,  and  every  department  and  function  of  the 
Government,  to  eliminate  the  injustices  exposed  by  this  commission, 
to  the  end  that  each  laborer  may  "  secure  the  whole  product  of  his 
labor." 

FRANK  P.  WALSH. 

NOTE. — Chairman  Frank  P.  Walsh  also  presented  the  following 
dissenting  opinion: 

Although  I  have  signed  the  report  prepared  by  Mr.  Basil  M. 
Manly,  director  of  research  and  investigation,  because  I  believe 
it  represents  an  unassailable  statement  of  the  existing  industrial  sit- 
uation, because  it  fully  complies  with  the  requirements  of  the  act  of 
Congress  creating  the  commission,  and  because  the  recommendations 
are  as  a  whole  wise  and  necessary  for  the  welfare  of  the  Nation,  I, 
nevertheless,  desire  to  record  my  dissent  on  the  following  points :  ^ 

1.  The   recommendation   for   new    administrative   machinery   for 
mediation  and  arbitration  in  the  form  of  a  special  commission.     I 
believe  that  the  commission  created  by  the  Newlands  Act,  and  the 
Department  of  Labor,  if  their  powers  are  enlarged  and  they  are 
adequately  supported,  will  be  fully  able  to  deal  with  the  situation. 

2.  The  recommendations  for  a  literacy  test  as  a  method  of  restrict- 
ing immigration.     I  wish  to  record  my  opposition,  as  a  matter  of 
principle,  to  all  restrictions  upon  immigration. 

3.  The    recommendations    regarding    civil    government    in    such 
isolated  communities  as  coal  camps,  which  I  believe  can  not  be  ade- 
quately dealt  with  except  by  the  Government  taking  over  all  coal  lands 
and  leasing  them  upon  terms  which  will  make  possible  their  operation 
upon  a  cooperative  basis  by  the  workers. 

Notwithstanding  many  meritorious  statements  contained  in  the 
report  of  Commissioners  John  R.  Commons  and  Florence  J.  Harri- 
jnan,  I  feel  it  my  duty  to  dissent  from  the  same  in  toto,  for  the 
reasons  following: 

1.  It  wholly  fails  to  comply  with  the  law  creating  the  commission, 
in  that  it  does  not  set  forth  the  facts  regarding  the  condition  of  labor 
in  the  leading  industries  of  the  United  States  and  the  underlying 
causes  of  industrial  dissatisfaction. 


|V« 
S 


REPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS.  157 

2.  The  whole  scheme  of  the  control  of  labor,  and  the  laws  govern- 
g  the  same,  is  undemocratic  and  not  in  accord  with  the  established 

rinciples  of  representative  government. 

3.  The  entire  plan  suggested  is  opposed  to  the  habits,  customs,  and 
aditions  of  the  American  people. 

4.  The  suggestions  in  the  main  are  impractical  and  impossible  of 
performance. 

5.  It  opens  up  unlimited  opportunities  for  graft  and  corruption. 

6.  If  the  ponderous  legal  machinery  provided  for  in  this  report 
could  be  put  in  operation  throughout  our  Nation,  it  would  mean — 
(a)  that  the  economic  condition  of  the  workers  of  the  country  would 

absolutely  subjected  to  the  whim  or  caprice  of  an  army  of  officials, 
eputies,  and  Government  employees,  and  ( b )  the  establishment  of  an 
autocratic  control  over  the  business  operations  of  manufacturers, 
merchants,  and  other  employers,  repugnant  to  American  standards  of 
freedom  in  manufacture  and  commerce. 


SUPPLEMENTAL    STATEMENT    OF    COMMISSIONER    AUSTIN   B. 

GARRETSON. 

My  signature  is  appended  to  the  report  of  Mr.  Basil  M.  Manly, 
director  of  research  and  investigation  of  the  United  States  Commis- 
sion on  Industrial  Relations,  submitted  to  the  commission  and  trans- 
mitted herewith,  as  to  the  findings  of  fact  contained  therein. 

I  am  in  general  agreement  with  the  recommendations  contained  in 
that  report  except  as  to  the  formation  of  the  system  of  State  and 
Federal  commissions  and  a  Federal  industrial  council. 

On  this  recommendation  I  neither  approve  nor  condemn.  But  out 
of  regard  for  the  opinion  of  the  great  body  of  intrastate  labor  most 
directly  affected,  I  dissent. 

I  am  also  in  accord  with  the  statement  of  fact  contained  in  the 
report  of  George  P.  West  on  the  Colorado  situation. 

I  am  favorable  to  the  extension  of  the  provisions  of  the  Newlands 
Act  to  all  classes  of  interstate  employees  who  can  constitutionally  be 
brought  under  its  provisions  and  would  favor  the  enlargement  of  the 
body  administering  it  to  meet  the  added  responsibilities  which  would 
thereby  be  placed  upon  it,  but  limiting  the  powers  thereof  to  the 
settlement  of  industrial  disagreements  and  to  the  gathering  of  infor- 
mation germane  to  their  mission. 

I  favor  the  creation  of  State  commissions,  similarly  constituted  and 
acting  in  corelation  and  understanding  with  the  Federal  board. 

I  heartily  concur  with  the  report  of  Commissioners  Lennon  and 
O'Connell  except  on  those  points  where  disagreement  is  herein  noted. 
I  dissent  in  whole  from  report  rendered  by  Commissioner  J.  E. 
Commons.  I  render  individual  opinion  and  suggestion  only  on — 

CAUSES    UNDERLYING    INDUSTRIAL    UNREST. 

Any  student  who  accepts  and  applies  the  belief  that  the  "proper 
study  of  mankind  is  man  "  can  not  fail  to  trace  certain  fundamental 
causes,  general  in  their  character,  which  underlie  industrial  unrest 
which  will  continue  to  grow  until  either  the  causes  are  peacefully 
removed  or  revolution  ensues. 

To  me  there  appear  to  be  four  of  these  basic  causes. 

The  first  lies  in  the  inequitable  distribution  of  the  fruits  of 
industry.. 

Our  industrial  system  makes  it  possible  for  one  man,  in  only  a 
portion  of  the  span  of  human  productive  life,  to  take  unto  himself 
and  claim  as  his  own  a  fortune  of  a  hundred  millon  dollars  or  more, 
while  millions  of  deserving  men,  availing  themselves  of  every  oppor- 
tunity for  unremitting  toil,  are  only  able  to  secure  a  grave  in  the 
potters'  field  or  else  burden  their  families  with  an  installment  debt 
for  the  cost  of  interment. 

158 


REPORT  OP  COMMISSION   ON  INDUSTRIAL  RELATIONS.  159 


The  creation  of  such,  colossal  fortune  naturally  breeds  in  the  mind 
of  the  possessor  the  sentiment,  belief,  and  practice  that  he  is  superior 
to  society  and  not  subject  to  the  law.  The  possession  thereof  makes 
him  unregardful  of  the  opinions  of  society  or  of  the  mandates  of 
the  law,  incites  him  to  disregard  and  hold  himself  independent  of 
the  moral  precepts  and  beliefs  of  society  and  tends  toward  the  effort 
to  prostitute  the  administration  of  justice,  and  under  the  present 
system  renders  him  practically  immune  from  the  penalties  prescribed 
by  the  law. 

The  transmission  to  heirs  or  trustees,  degenerate  or  otherwise,  of 
fortunes  so  vast  or  of  business  interests  so  far-reaching  makes  them 
the  virtual  arbiters  of  the  destiny  of  hundreds  of  thousands  of  their 
fellow  beings  in  regard  to  whom  they  have  neither  sympathetic 
feeling,  intelligent  interest,  nor  humanitarian  desire,  and  the  testi- 
mony before  this  commission  has  made  it  evident  that  in  some 
instances  these  heirs  or  representatives  even  resent  the  imputation 
that  any  obligation  whatever  can  rest  upon  them  for  the  welfare  of 
the  said  fellow  beings  or  that  even  intelligent  knowledge  as  to  what 
would  constitute  well-being  should  be  required  of  them. 

Second,  the  methods  of  the  formation  and  administration  of  law 
would  in  themselves  justify  undying,  righteous  unrest  from  the  fact 
that  they  create,  encourage,  and  demonstrate  knowledge  and  belief 
that  there  is  no  equality  before  the  law  as  between  the  man  who  has 
and  the  man  who  has  not. 

Primarily  there  is  the  trend  through  legislation  to  exalt  the  prop- 
erty right  at  the  expense  of  the  personal  right.  Next,  the  tendency 
of  a  great  majority  of  our  courts  to  extend  and  amplify  this  trend. 
This  appears  in  the  declaring  unconstitutional  of  a  great  portion  of 
the  legislation  that  in  later  years  is  appearing  if  it  in  any  way 
restricts  the  rights  of  property,  while  at  the  same  time  any  legisla- 
tive act  which  tends  to  make  effective  the  constitutional,  personal 
right  of  the  individual  is  nullified  upon  the  same  ground. 
In  other  words,  to  exalt  money  above  man. 

The  tendency  also  of  a  large  number  of  the  same  tribunals  is  to 
legalize  the  maintenance  of  armed  forces,  either  by  the  corporation 
or  the  large  individual  employer,  and  the  virtual  levying  of  war 
through  the  use  of  the  State  militia  as  a  private  guard  for  property 
interests,  or  as  an  economic  weapon  for  the  purpose  of  prejudicing 
the  interests  of  the  worker,  is  abetted  and  approved,  while  at  the 
same  time  rigorously  prosecuting  and  punishing  the  individual  for 
taking  any  similar  action,  individually  or  collectively,  in  defense  of 
his  person  or  his  family. 

Thus  the  man  who  uses  a  deadly  weapon  to  protect  himself  or  his 
home  against  the  aggression  of  hired  thugs  has  set  in  motion  against 
him  the  whole  machinery  of  the  State,  while  the  corporation  which 
enlisted,  equipped,  and  paid  a  private  armed  force,  formed  and 
used  not  for  the  maintenance  of  peace  or  the  protection  of  property 
but  solely  as  an  economic  weapon,  is  lauded  as  a  conservator  of  peace, 
law,  and  order. 

Our  laws  deal  strictly  and  effectively  with  those  who  contribute 
to  the  delinquency  of  an  individual,  but  the  hirelings  of  a  corpora- 
tion may  debauch  a  State  for  their  own  economic  gain  and  receive 
only  laudation  from  those  who  "  sit  in  the  seats  of  the  mighty." 


160  REPOET  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS. 

The  man  who,  on  account  of  hunger  of  himself  or  family,  steals  a 
loaf  is  held  up  to  public  view  as  a  "  horrible  example  "  of  the  in- 
crease of  crime  and  decadence  of  the  moral  sense,  while  he  who 
exploits  the  public  or  by  dishonest  or  fraudulent  representation  or 
manipulation  secures  millions  of  their  money  is  by  the  same  agencies 
held  up  to  the  youth  of  the  land  as  an  example  of  what  intelligent 
effort  and  devotion  to  business  may  accomplish. 

The  system  of  wholesale  arrests  during  industrial  disturbances  for 
acts  which,  committed  under  ordinary  conditions  and  when  no  indus- 
trial disturbances  prevailed,  would  not  constitute  ground  for  arrest, 
is  one  of  the  significant  indications  of  the  use  of  governmental 
agencies,  not  as  a  preserver  of  peace  but  as  a  purely  economic  weapon. 

The  intrusion  of  what  has  been  aptly  described  as  "  invisible  gov- 
ernment "  into  all  the  chanels  of  life — the  educational  system,  pri- 
mary, secondary,  and  higher,  the  church,  the  press,  the  legislative 
branch,  and  the  judicial  system — and  the  recognized  potency  of  its 
meretricious  efforts  contributes  its  elements  to  the  whole. 

Third,  irregularity  of  employment,  with  the  consequent  restriction 
of  opportunity  and  with  its  consequent  extension  of  belief  that  unre- 
mitting -toil  under  present  conditions  can  bring  no  fair  recompense, 
thus  stifling  healthy  incentive  to  labor,  is  creating  an  army  of  unem- 
ployed that  must,  in  the  last  analysis,  be  reckoned  with,  and  unless 
remedy  is  found  whereby  incentive  may  be  restored  and  recompense 
be  made  apparent,  society  itself  must  pay  the  forfeit. 

Fourth,  land  monopoly  with  resulting  prohibitive  price,  the  great- 
est influence  in  creating  congestion  in  the  cities,  bears  its  own  share 
of  the  responsibility  for  unrest. 

Tracing  the  history  of  every  vanished  civilization  makes  apparent 
the  fact  that  in  every  instance  decadence  was  preceded  by  urban 
congestion  and  by  immense  land  holdings  by  the  aristocrat  or  the 
capitalist. 

As  to  the  remedy  for  these  evils,  an  income  and  inheritance  tax 
that  would  be,  above  a  certain  figure,  absolutely  confiscatory  would 
make  impossible,  first,  the  creation,  and,  second,  the  transmission  of 
the  dominating  accumulation  of  wealth  in  the  hands  of  any  indi- 
vidual, group,  or  family.  When  the  unlimited  power  of  reward  or 
purchase  had  ceased  to  exist,  the  subconscious  tendency  of  legisla- 
tures and  of  those  who  interpret  and  administer  the  law  to  be  sub- 
servient to  property  interests  would  of  necessity  disappear. 

It  is  worth  consideration  as  to  whether  or  not  a  limitation  can 
properly  be  set  upon  profit  in  a  business  enterprise. 

Every  code,  ancient  and  modern,  prescribes  penalties  for  usury, 
and  modern  codes  define  the  rate  of  interest  permitted.  Therefore, 
if  a  man  loans  money,  he  can  only  demand  what  is  described  as  the 
legal  rate  for  the  use  thereof. 

Is  it,  or  is  not,  equally  consistent  for  the  Government  to  prescribe 
a  rate  beyond  which  profit  shall  not  extend  ? 

In  the  question  of  dealing  with  land,  should  not  the  same  doctrine 
be  applied  to  land  that  in  the  arid  States  is  applied  to  water,  i.  e., 
that  no  more  land  can  t>e  held  by  an  individual  than  he  can  put  to 
productive  "  use,"  thus  making  unused  land  revert  to  the  State  and 
acquirable  by  tho^e  who  would  utilize  it? 

A.  B.  GARRETSON. 


SUPPLEMENTAL  STATEMENT  OF  COMMISSIONERS  JOHN  B. 
LENNON  AND  JAMES  O'CONNELL. 

Our  signatures  are  appended  to  the  report  of  Mr.  Basil  M.  Manly, 
director  of  research  and  investigation  of  the  United  States  Commis- 
sion on  Industrial  Relations,  submitted  to  the  commission  at  its 
session  held  in  Chicago  during  the  months  of  July  and  August,  1915, 
except  that  portion  of  the  report  recommending  a  system  of  media- 
tion, conciliation,  investigation,  and  arbitration,  applicable  to  both 
State  and  Nation,  which  proposes  to  create  a  commission  of  three 
members,  together  with  an  advisory  council  of  20  members,  10  repre- 
senting employers  and  10  representing  employees.  The  entire  plan 
is  set  forth  in  the  report  of  the  staff  as  submitted  to  the  Commission 
on  Industrial  Relations;  also  in  a  report  to  the  commission  by  Prof. 
George  E.  Barnett,  and  also  in  the  report  of  Commissioner  John  R. 
Commons.  From  these  recommendations  we  dissent  for  reasons 
assigned  in  this  statement. 

The  evidence  submitted  to  the  commission  at  public  hearings,  to- 
gether with  the  evidence  secured  by  special  investigators,  has  been 
fairly  set  forth  in  Mr.  Manly 's  report  and  with  even  justice  to  all, 
whether  employers,  employees,  or  the  public. 

CRITICISMS    NOT    JUSTIFIED. 

Our  fellow  commissioners  who  are  representatives  of  the  employers 
contend  in  their  statement  that  the  report  of  Mr.  Basil  M.  Manly 
for  the  staff  is  deficient  in  that  it  does  not  properly  present  an  in- 
dictment against  labor  on  the  grounds  of  fostering  and  promoting 
violence  in  trade  disputes,  jurisdictional  disputes  accompanied  by 
strikes,  limitation  of  output,  sympathetic  strikes,  contract  break- 
ing, apprenticeship  rules,  refusal  to  use  nonunion  materials, 
alleged  graft,  and  so  forth,  and  that  it  does  not  include  these 
things  among  the  fundamental  causes  of  industrial  unrest.  All 
the  evidence  submitted  to  the  commission,  as  we  understand  and 
interpret  it,  proves  that  these  things,  in  so  far  as  they  do  exist,  are 
in  no  sense  causes  of  industrial  unrest  but,  on  the  contrary,  are 
evidences  of  existing  industrial  unrest  and  are  evils  that  are  inci- 
dental to  a  situation  wherein  labor  has  at  times  been  forced  to  fight 
with  such  weapons  as  it  could  command  for  advantages  and  rights 
that  in  justice  should  be  freely  accorded  to  the  wage  earners.  So 
long  as  labor  organizations  are  forced  by  employers  to  fight  for  the 
mere  right  to  exist,  and  so  long  as  wages  paid  to  labor  are  so  low 
that  the  unorganized  wrage  earner  often  sees  no  choice  except  that  be- 
tween resorting  to  such  weapons  or  seeing  himself  and  his  family 
sink  below  the  poverty  line,  just  so  long  will  these  evils  at  times 
manifest  themselves  as  symptoms  of  the  worker's  desperation.  The 
union,  fighting  for  its  right  to  live,  is  sometimes  forced  to  tolerate 

38819°— 16 11*  161 


162  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

acts  that  would  not  be  countenanced  if  its  entity  were  secure  and  its 
energies  were  not  absorbed  in  fighting  for  existence. 

STRONG  ORGANIZATIONS  THE   CURE. 

Experience  shows  that  the  evils  complained  of  rapidly  disappear 
in  labor  organizations  as  soon  as  the  organization  prevails  over  the 
opposition  of  the  employers  and  establishes  its  right  to  organize. 
Strong  unions  mean  decent  wages,  and  decent  wages  raise  wrage 
earners  to  a  plane  of  thought  and  action  where  all  their  acts  and 
mental  processes  must  no  longer  be  directed  toward  a  desperate 
struggle  for  the  very  right  of  themselves  and  families  to  live. 

Organized  labor  fully  realizes  how  unfortunate  it  is  that  labor  in 
its  struggle  for  existence  has  occasionally  been  driven  to  consider  its 
immediate  advantage  at  the  expense  of  the  true  economic  principles 
that  must  govern  in  the  long  run.  All  the  energies  of  organized 
labor's  representatives  have  been  exerted  to  minimize  or  eliminate 
any  tendency  toward  limitation  of  output  or  jurisdictional  disputes, 
but,  at  the  same  time,  organized  labor  insists  that  these  tendencies 
where  they  exist  are  the  logical  and  inevitable  outgrowth  of  evils  in 
industry  that  can  be  removed  only  by  trade-union  action  by  the 
wage  earners.  We  could  cite  evidence  at  great  length  to  show  that 
the  tendencies  complained  of,  so  far  as  they  exist  at  all,  have  grown 
out  of  the  hard  necessities  with  which  labor  has  been  confronted. 
It  is  enough  here  to  quote  briefly  from  the  testimony  of  the  distin- 
guished economist,  Prof.  Jacob  H.  Hollander,  of  Johns  Hopkins 
University,  given  before  this  commission  in  New  York  City  on 
January  20,  1915.  Prof.  Hollander  in  discussing  the  limitation  of 
output  said : 

We  lose  sight  of  the  fact  that  trade-unions  and  unionists  are  not  soldiering 
in  the  matter,  but  they  are  animated  by  a  very  high  degree  of  fraternity 
in  the  matter,  that  they  are  willing  to  adopt  the  same  principle  if  it  is  a  matter 
of  piecework  instead  of  time  work ;  that  the  endeavor  of  society  should  be  to 
bring  back  industrial  conditions  from  that  unwholesome  mess  into  which  they 
have  slumped  from  this  abnormal  disproportionate  allotment  of  wrorkers  to 
particular  fields  in  excess  of  the  requirements  in  those  fields.  We  must  without 
deviating  one  iota  from  the  proposition  which  you  have  stated  that  it  is  socially 
unsound  that  workmen  should  do  less  than  they  properly  could — society  should 
seek  to  bring  about  conditions  where  they  will  do  what  they  can  without  in- 
volving displacement  and  unemployment  on  the  part  of  their  fellow  workmen. 

We  hold  that  the  report  of  Mr.  Manly  contains  no  statement  that 
is  unworthy  of  credence,  and  that  will  not  bear  careful  investigation. 
The  conclusions  and  recommendations  are  warranted  by  the  state- 
ment of  facts  and  the  accumulated  evidence  in  the  hands  of  the 
commission. 

THE  EVIDENCE. 

All  evidence  accumulated,  whether  by  special  investigators  or  at 
public  hearings,  will  be  submitted  to  Congress,  and  we  trust  the  peo- 

Ele  of  our  country  will  demand  that  it  be  published  in  full,  particu- 
trly  the  following,  which  are  well  worth  the  most  careful  study  by 
all  persons  interested  in  human  welfare.     The  reports  cited  below 
have  been  prepared  by  competent  investigators  and  were  submitted 
to  the  commission  after  careful  investigation  and  verification  by 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  163 

Director  Basil  M.  Manly  and  by  members  of  the  commission,  and  are 
the  latest  information  upon  the  various  subjects  covered  by  them.1 

Evidence  Taken  at  All  Public  Hearings. 

Causes  of  Industrial  Unrest,  by  Mr.  W.  J.  Lauck. 

Violence  in  Labor  Disputes,  by  Mr.  Luke  Grant. 

Structural  Iron  Workers,  by  Mr.  Luke  Grant. 

Sickness  Prevention  and  Insurance,  by  Dr.  B.  S.  Warren. 

Mediation,  Arbitration,  and  Investigation,  by  Prof.  Geo.  E.  Barnett, 

Conditions  of  Labor  in  Principal  Industries,  by  Mr.  Edgar 
Sydenstricker. 

Efficiency  Systems  in  Industry,  by  Prof.  Robert  F.  Hoxie,  Mr. 
John  P.  Frey,  and  Mr.  Robert  G.  Valentine. 

Industrial  Education,  by  Commissioner  John  B.  Lennon. 

Labor  Complaints  and  Claims,  by  Mr.  P.  A.  Speek. 

Trade-Union  Law,  by  Mr.  J.  W.  Bryan. 

Colorado  Situation,  by  Mr.  George  P.  West. 

The  Telephone  and  Telegraph  Industry,  by  Mr.  Christopher  T. 
Chenery. 

Labor  Conditions  in  Porto  Rico,  by  Mr.  Christopher  T.  Chenery. 

Labor  Conditions  in  the  Black  Hills,  by  Mr.  William  P.  Harvey. 

Labor  Conditions  in  Los  Angeles,  by  Mr.  William  P.  Harvey. 

Preliminary  Report  on  the  Land  Question,  by  Mr.  Charles  W, 
Holman. 

Agricultural  Labor  and  Tenancy,  by  Mr.  John  L.  Coulter. 

Unemployment,  by  Mr.  William  M.  Leiserson. 

Extent  and  Growth  of  Labor  Organizations,  by  Mr.  Lee  Wolman. 

Injunctions  in  Labor  Disputes,  by  Mr.  Edwin  E.  Witte. 

The  Inferior  Courts  and  Police  of  Pater  son,  N.  J.,  by  Mr.  Red- 
mond S.  Brennan  and  Mr.  Patrick  F.  Gill. 

Chinese  Exclusion,  by  Mr.  Edward  A.  Fitzpatrick. 

EXTENT  OF  UNREST. 

The  principal  duty  imposed,  under  the  law  creating  the  commis- 
sion, was  to  seek  to  ascertain  the  causes  of  industrial  unrest  and  offer 
such  recommendations  as  we  believe  might  alleviate  that  unrest. 
There  can  be  no  question  but  that  unrest  exists,  in  some  instances,  to 
an  alarming  extent.  Thousands  and  tens  of  thousands  of  our  people 
feel  that  they  are  deprived,  under  existing  conditions  in  industry,  of 
an  opportunity  to  secure  for  themselves  and  their  families  a  standard 
of  living  commensurate  with  the  best  ideals  of  manhood,  womanhood, 
and  childhood.  They  resent  the  fact  that  the  existing  system  of  the 
distribution  of  wealth  creates  at  one  end  of  our  industrial  scale  a  few 
multi-millionaires  and  at  the  other  end  thousands  and  tens  of 
thousands  of  men,  women,  and  children  who  are  at  all  times  in  a 
situation  where  they  are  uncertain  as  to  where  their  next  meal  will 
come  from.  Hungry,  poorly  clothed,  and  without  the  opportunities 
that  a  fully  rounded  life  requires,  they  become  filled  with  a  sullen 
resentment  that  bodes  no  good  for  the  future  of  our  Republic. 

We  have  found  men  and  women  who  are  inclined  to  ascribe  this 
condition  to  the  fact  that  the  Government  exercises  no  power  of 
mandatory  character  to  prevent  strikes  and  lockouts.  Many  have 

1  These  reports  have  not  been  printed  with  this  document,  on  the  recommendation  of 
Chairman  Frank  P.  Walsh,  as  stated  in  his  letter  in  Senate  Report  No.  143,  Sixty-fourth 
Congress.  The  reports  on  Structural  Iron  Workers  and  the  Colorado  Situation  were 
printed  by  the  commission  itself  in  1915. 


164  EEPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

been  the  propositions  submitted  to  us  for  compulsory  arbitration  or, 
at  least,  compulsory  investigation  with  power  to  recommend  a  settle- 
ment. Some  have  proposed  an  elaborate  machinery,  to  be  set  up  by 
the  General  Government,  and  of  a  similar  character  by  the  States, 
providing  for  conciliation,  mediation,  arbitration,  and  investigation, 
all  of  which,  while  without  definite  compulsory  features,  establishes  a 
legal  machinery  that  must  of  necessity  exercise  an  influence  in  that 
direction. 

The  plan  for  the  creation  of  an  industrial  commission,  both  na- 
tional and  State,  proposes  to  assign  to  a  commission  of  three  mem- 
bers the  administration  of  all  labor  laws  of  either  State  or  Nation, 
giving  to  them  powers  far  in  excess  of  those  exercised  by  the  Presi- 
dent of  the  United  States  or  the  governor  of  any  State.  This  we 
believe  to  be  bureaucracy  run  mad,  and  a  subversion  of  democracy 
dangerous  to  the  civil  and  social  liberty  of  all  citizens.  We  hold  that 
all  power  should  be,  in  the  final  analysis,  with  the  people,  and  we, 
therefore,  dissent  from  any  such  plan. 

NEW    GOVERNMENTAL    MACHINERY    UNWISE. 

The  activities  of  such  a  commission,  supplemented  by  the  proposed 
advisory  committees  of  employers  and  labor  representatives,  would 
be  so  balanced  as  to  prevent  substantial  progress  and  tend  to  per- 
petuate present  conditions.  Such  a  plan  conceives  of  labor  and 
capital  as  static  forces  and  of  the  relations  between  them  as  always 
to  remain  unchanging. 

We  believe  that  the  work  now  being  done  by  the  Department  of 
•Labor  in  industry  generally,  and  by  the  Board  of  Mediation  and 
Conciliation,  dealing  with  interstate  public  utilities,  is  better  than 
any  that  could  be  expected  of  any  additional  board  that  has  been 
suggested  to  this  commission.  We  believe  that  the  Department  of 
Labor,  with  further  experience  and  larger  appropriations,  will  de- 
velop a  high  state  of  efficiency  in  adjusting  labor  disputes  that  are 
capable  of  being  adjusted  by  anyone  other  than  the  parties  directly 
interested  and  will  adequately  carry  on  the  work  provided  by  the 
law  creating  the  Department  of  Labor,  to  wit : 

SECTION  1.  The  purpose  of  the  Department  of  Labor  shall  be  to  foster,  pro- 
mote, and  develop  the  welfare  of  the  wage  earners  in  the  United  States,  to 
improve  their  working  conditions,  and  to  advance  their  opportunities  for 
profitable  employment. 

SEC.  8.  The  Secretary  of  Labor  shall  have  power  to  act  as  mediator  and  to 
appoint  commissioners  of  conciliation  in  labor  disputes  whenever  in  his  judg- 
ment the  interests  of  industrial  peace  require  it  to  be  done. 

We  favor  the  extension  of  the  Newlands  Act  to  cover  all  employees 
engaged  in  interstate  commerce,  such  as  the  railroad  telegraphers, 
the  shop  and  track  men  employed  by  railroads,  the  employees  of 
express  companies,  of  the  Pullman  Co.,  of  commercial  telegraph 
and  telephone  companies,  and  other  public  utilities  performing  inter- 
state service  that,  in  the  interest  of  the  Nation,  must  be  continuous. 

The  evidence  submitted  to  this  commission  is  substantially  to  the 
effect  that  where  trade-union  organization  exists  among  the  workers, 
there,  at  the  same  time,  exists  the  least  amount  of  industrial  unrest 
of  a  character  that  is  dangerous  to  the  peace  and  welfare  of  our 
Nation.  It  is  true  that  the  union  men  and  women  are  not  satisfied 
with  their  conditions;  they  are  not,  however,  despondent  as  to  the 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  165 

possibility  of  securing  better  conditions ;  they  know  what  the  unions 
have  accomplished,  and  they  have  an  abiding  faith  that  their  further 
desires  can  be  attained. 

Instead  of  any  elaborate  machinery  for  the  prevention  of  strikes 
or  lockouts  we  are  convinced,  from  the  testimony  gathered  by  this 
commission,  that  the  most  effectual  course  that  can  be  pursued  to 
bring  about  general  contentment  among  pur  people,  based  upon  a 
humane  standard  of  living,  is  the  promotion  of  labor  organization. 
The  most  casual  investigator  will  soon  discover  that  in  those  lines 
of  industry  where  organization  of  labor  is  the  strongest,  there  is  the 
least  danger  of  industrial  revolt  that  would  endanger  the  funda- 
mental principles  of  our  Government  and  the  maintenance  of  a 
nation  with  respect  for  law  and  order.  Where  organization  is  lack- 
ing dangerous  discontent  is  found  on  every  hand;  low  wages  and 
long  hours  prevail ;  exploitation  in  every  direction  is  practiced ;  the 
people  become  sullen,  have  no  regard  for  law  or  government,  and  are, 
in  reality,  a  latent  volcano,  as  dangerous  to  society  as  are  the  vol- 
canoes of  nature  to  the  landscape  surrounding  them. 

THE  ONE  TRUE  REMEDY. 

We  therefore  urge  as  the  great  remedy  for  such  unnecessary  in- 
dustrial unrest  as  we  have  found  more,  and  more,  and  still  more 
organization  of  labor  and  of  the  employers  in  each  industry  as  well. 
The  education  of  the  trade  unions  has  been  conducive  to  a  higher 
and  better  citizenship.  In  recent  years  there  have  come  to  our  assist- 
ance scores  and  hundreds  and  thousands  of  people  outside  the  ranks 
of  unionists — ministers,  professors,  journalists,  professional  men  of 
all  kinds — who  have  reached  the  conclusion  that  is  herein  stated,  that 
the  most  efficient  cure  for  such  industrial  unrest  as  should  be  cured, 
is  union  organization. 

We  hold  that  efforts  to  stay  the  organization  of  labor  or  to  restrict 
the  right  of  employees  to  organize  should  not  be  tolerated,  but  that 
the  opposite  policy  should  prevail,  and  the  organization  of  the  trade 
unions  and  of  the  employers'  organizations  should  be  promoted,  not, 
however,  for  the  sole  purpose  of  fighting  each  other,  but  for  the  com- 
mendable purpose  of  collective  bargaining  and  the  establishing  of 
industrial  good  will.  Organizations  of  employers  that  have  no 
object  in  view  except  to  prevent  labor  having  a  voice  in  fixing  the 
conditions  of  industry  under  which  it  is  employed  have  no  excuse 
for  existence,  as  they  are  a  bar  to  social  tranquillity  and  a  detriment 
to  the  economic  progress  of  our  country.  The  evidence  before  the 
commission  shows  that  organized  labor  has  no  desire,  nor  has  it 
attempted,  to  control  the  business  of  the  employer.  It  insists  that 
it  has  a  right  to  a  voice,  and  a  potent  voice,  in  determining  the  con- 
ditions under  which  it  shall  work.  This  attitude,  we  are  sure,  will 
be  continued  in  spite  of  the  opposition  of  any  so-called  employers' 
organizations.  This  country  is  no  longer  a  field  for  slavery,  and 
where  men  and  women  are  compelled,  in  order  that  they  may  live, 
to  work  under  conditions  in  determining  which  they  have  no  voice, 
they  are  not  far  removed  from  a  condition  existing  under  feudalism 
or  slavery. 

In  emphasizing  with  all  the  force  at  our  command  the  necessity  of 
collective  action  by  wage  earners  through  strong  organizations,  if 


166  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

the  problem  of  industrial  unrest  is  to  be  solved,  we  wish  again  to 
quote  from  testimony  of  Prof.  Hollander.  He  undertook  to  sum 
up  for  this  commission  those  conclusions  regarding  the  solution  of 
this  problem  that  have  been  reached  not  only  by  himself,  but  by  the 
great  body  of  economists  in  this  country  and  abroad.  He  said : 

The  opinion  of  political  economists  in  so  far  as  I  can  voice  it  is 
that  social  unrest,  which  is  manifest  not  only  in  this  country  but  in 
every  industrial  country,  is  due  to  the  existence  of  economic  want  or 
poverty,  if  by  that  we  understand  not  on  the  one  hand  pauperism  or 
on  the  other  economic  inequality.  By  poverty  I  mean  the  existence 
of  large  areas  of  industrial  society  in  receipt  of  incomes  less  than 
enough  to  maintain  themselves  and  those  dependent  upon  them  in 
decent  existence.  We  believe  that  is  the  consequence,  not  of  any  abso- 
lute dearth — that  the  world  produces  enough  to  go  around;  that  it 
is,  therefore,  not  a  question  of  insufficient  production,  but  of  defects 
in  distribution.  *  *  *  There  is  a  view  among  economists  that 
there  is  nothing  in  any  current  theory  of  wages  that  precludes  the 
laborer  from  obtaining  a  sufficient  wage,  and  that  if  he  fails  it  must 
be  in  consequence  of  the  fact  that  he  enters  into  the  wage  contract 
on  a  plane  of  inequality.  The  wage  contract,  in  short,  is  the  result 
of  a  bargain  between  the  employer  and  the  employee,  and  if  the 
employer  is  in  a  superior  competitive  position  by  reason  of  combina- 
tion and  the  laborer  is  unorganized  he  is  at  a  bargaining  disadvan- 
tage which  is  certain  to  redound  to  his  hurt. 

I  think  political  economists  accordingly  then  are  in  agreement 
that  trade  unionism  is  essential  as  a  means  of  bringing  the  workmen 
into  industrial  bargaining  on  a  plane  of  equality. 

******* 

You  have  asked  specifically  what  the  remedy  [for  poverty]  is.  It 
means  a  very  decided  revulsion  of  opinion  as  to  trade  unionism.  The 
general  attitude  among  employers  of  labor  is  often  open  and  decided 
opposition  to  organized  labor.  Until  society  recognizes  the  unwis- 
dom of  that  attitude  and  demands  that  the  laborer  must  enter  into 
his  wage  bargain  on  a  plane  of  competitive  equality,  society  has  not 
lifted  its  finger  to  remedy  that  evil. 

THE  PUBLIC'S  DUTY. 

We  submit  the  report  of  Mr.  Basil  M.  Manly  as  our  report,  asking 
for  it  the  fullest  possible  consideration  by  the  men  and  women  of 
our  country  who  are  interested  in  the  social  and  moral  uplift  of 
humanity. 

Labor  must  work  out  its  own  salvation.  Wageworkers  can  attain 
that  degree  of  well-being  to  which  they  are  entitled  only  by  their  own 
efforts.  The  general  public  can  not  be  expected  to  do  for  them  what 
they  fail  to  do  for  themselves,  nor  would  it  be  desirable  that  those 
rights  and  benefits  to  which  they  are  entitled  should  be  handed  down 
to  them  by  the  Government  or  by  organized  society  as  grace  from 
above.  But  the  general  public  is  vitally  interested  'in  the  efforts  of 
wageworkers  to  win  for  themselves  equal  justice  and  such  a  degree 
of  material  well-being  as  will  enable  them  to  maintain  themselves 
and  their  families  in  comfort,  security,  and  health.  Society's  interest 
in  the  triumph  of  labor's  cause  should  spring  not  only  from  the  love 
of  justice  and  the  human  sympathy  that  animates  every  good  citizen, 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  167 

but  from  a  realization  that  industrial  and  social  evils  menacing  large 
groups  of  the  population  can  not  continue  without  eventually  bring- 
ing disaster  to  society  as  a  whole.  While  inviting  the  aid  of  every 
good  citizen,  we,  as  representatives  of  organized  labor,  urge  that  this 
aid  be  directed  not  solely  to  seeking  new  legislation  or  new  govern- 
mental machinery  designed  as  a  cure-all,  but  to  giving  moral  support 
to  labor's  own  efforts,  and  insisting  that  trade  unions  be  fostered  and 
encouraged  as  the  most  effective  agencies  making  for  the  wage- 
workers'  progress. 

We  concur  in,  and  adopt  as  a  part  of  our  report,  the  statement 
under  the  heading  "  Supplemental  statement  of  Chairman  Frank  P. 
Walsh." 

We  concur  in  the  dissenting  opinion  of  Chairman  Frank  P.  Walsh 
from  the  report  of  Commissioners  John  R.  Commons  and  Florence  J. 
Harriman. 

We  concur  in  that  part  of  the  report  of  Commissioner  Austin  B. 
Garretson  under  the  heading  "  Causes  underlying  industrial  unrest." 

We  concur  in  the  history  and  statement  of  facts  regarding  the 
Colorado  strike,  as  written  by  Mr.  George  P.  West,  which  is  printed 
as  an  addendum  to  this  report.1 

JOHN  B.  LENNOX. 
JAMES   O'CONNELL. 

1  The  report  by  Mr.  George  P.  West  has  not  been  printed  with  this  document,  on  the 
recommendation  of  Chairman  Frank  P,  Walsh,  as  it  was  printed  by  the  commission  .Itself 
In  1915.  See  his  letter  in  Senate  Report  No.  143,  Sixty-fourth  Congress. 


II. 


Report  of  Commissioners  John  R.  Commons 
and  Florence  J.  Harriman 


SIGNED  BY 


Commissioners  Commons,  Harriman,  Weinstock, 
Ballard,  and  Aishton 


TOGETHER  WITH 


The  Dissenting  Opinion  of  Commissioner  Weinstock,  the  Report  of 

Commissioners  Weinstock,  Ballard,  and  Aishton,  and  the 

Supplemental  Statement  of  Commissioner  Ballard 


REPORT  OF  COMMISSIONERS  JOHN  R.  COMMONS  AND  FLORENCE 

J.  HARRIMAN. 


ENACTMENT,   INTERPRETATION,   AND   ENFORCEMENT   OF  LABOR 

LAW. 

We  can  not  find  ourselves  able  to  agree  to  any  of  the  findings  or 
recommendations  of  the  staff  or  any  resolutions  based  upon  them, 
because  they  have  not  the  criticism  of  employers,  employees,  and 
others  affected  by  them,  which  we  consider  indispensable  in  order 
that  we  might  have  before  us  assurance  that  they  were  accurate  and 
not  chargeable  with  important  omissions.  These  reasons  are  stated 
more  fully  in  paragraph  4  following,  and  are  equally  appropriate 
for  those  who  refuse  to  sign  this  report.  We  find  ourselves  unable  to 
agree  with  other  recommendations  and  resolutions  for  legislation, 
because  they  contain  few  or  no  practicable  suggestions  for  legislation 
that  would  be  enforceable,  or  because  they  are  directed  to  making  a 
few  individuals  scapegoats,  where  what  is  needed  is  serious  attention 
to  the  system  that  produces  the  demand  for  scapegoats,  and  with  it 
the  breakdown  of  labor  legislation  in  this  country.  In  this  way  we 
interpret  the  act  of  Congress  which  requires  us  to  inquire  "  into  the 
scope,  methods,  and  resources  of  existing  bureaus  of  labor  and  into 
possible  ways  of  increasing  their  usefulness."  From  our  personal 
experience  we  agree  with  many  of  the  alleged  findings  and  with  the 
objects  intended  to  be  accomplished  by  the  enactment  of  proposed 
laws,  but  we  consider  that  it  is  not  worth  while  to  propose  any  more 
laws  until  we  have  provided  methods  of  investigation,  legislation, 
and  administration  which  can  make  laws  enforceable.  A  law  is 
really  a  law  only  to  the  extent  that  it  is  enforced,  and  our  statute 
books  are  encumbered  by  laws  that  are  conflicting,  ambiguous,  and 
unenforceable,  or  partly  enforced.  Here  is  probably  the  greatest 
cause  of  industrial  unrest,  for  as  soon  as  people  lose  confidence  in 
the  making  of  laws  by  the  legislature,  in  their  interpretation  by  the 
courts,  and  in  their  administration  by  officials,  they  take  the  law  into 
their  own  hands.  This  is  now  being  done  by  both  employers  and  em- 
ployees. Before  recommending  any  additional  much-needed  laws 
affecting  wages,  hours,  child  and  woman  labor,  unemployment,  or 
other  substantive  laws  to  improve  industrial  conditions,  we  must  call 
attention  to  the  widespread  breakdown  of  existing  laws  and  must 
devise  methods  of  revising  them  and  enacting  and  enforcing  new 
laws  so  that  they  will  fit  actual  conditions  and  be  enforceable  and  en- 
forced. With  the  widespread  demand  for  more  laws  to  remedy  wide- 
spread and  well-recognized  causes  of  industrial  unrest,  there  is  a 
curious  feeling  that,  if  only  more  laws  are  placed  on  the  statute 
books,  they  will,  in  some  unexplained  way,  get  themselves  enforced. 

171 


172  KEPOET  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

While  recognizing  the  justice  of  much  of  this  demand  for  new  laws, 
we  are  not  placing  them  first  in  our  report,  but  rather  the  methods 
of  investigating  conditions,  of  enacting  legislation,  of  judicial  inter- 
pretation, and  administrative  enforcement  necessary  to  make  them 
worth  while  as  a  real  remedy. 

Other  industrial  nations  have  gone  far  ahead  of  the  United  btates 
in  adopting  labor  legislation,  much  of  which  is  also  needed  here; 
but  their  laws  are  drawn  up  so  as  to  be  enforceable,  and  their  machin- 
ery of  enforcement  is  such  that  the  people  are  willing  to  entrust  new 
laws  to  their  officials  for  enforcement.  Our  Government  is  different 
from  theirs  and  requires  different  methods,  but,  if  our  methods  and 
officials  can  not  be  made  as  effective  and  trustworthy  as  theirs,  then 
we  can  not  trust  more  laws  than  we  now  have  to  their  hands. 

One  of  the  most  important  facts  to  be  recognized  is  that  govern- 
ments, whether  State  or  Federal,  can  not  be  looked  to  alone  for 
remedying  evil  conditions.  As  soon  as  people  come  to  look  upon 
the  coercive  power  of  government  as  the  only  means  of  remedying 
abuses,  then  the  struggle  for  control  of  government  is  substituted 
for  the  private  initiative  through  private  associations,  from  which 
the  real  substantial  improvements  must  come.  We  must  look  for 
the  greatest  improvement  to  come  through  the  cooperation  with  gov- 
ernment of  the  many  voluntary  organizations  that  have  sprung  up 
to  promote  their  own  private  interests.  The  most  important  ones, 
for  our  purposes,  are  employers'  associations,  labor  unions,  and  farm- 
ers' organizations.  These  are  directly  affected  by  most  labor  legis- 
lation, and  they  have  much  more  powerful  influence  than  have  unor- 
ganized interests  upon  legislatures  and  administrative  officials. 

Furthermore,  the  struggle  between  capital  and  labor  must  be 
looked  upon,  so  far  as  we  can  now  see,  as  a  permanent  struggle  no 
matter  what  legislation  is  adopted.  If  this  is  not  recognized,  pro- 
posed remedies  will  miss  the  actual  facts.  But  there  are  certain 
points  where  the  interests  of  capital  and  labor  are  harmonious  or  can 
be  made  more  harmonious.  In  fact,  this  field  where  there  is  no  real 
conflict  between  employers  and  employees  is  much  wider  than  at 
first  might  be  imagined.  By  recognizing  these  two  facts  of  perma- 
nent opposition  and  progressive  cooperation,  it  may  be  possible  to 
devise  methods  of  legislation,  court  interpretation,  and  administra- 
tion which  will  reduce  antagonism  and  promote  cooperation.  For, 
while  we  can  not  look  to  government  alone  for  remedying  abuses, 
it  is  only  by  legislation  that  we  can  give  voluntary  organizations  a 
greater  share  in  working  out  their  own  remedies  and  in  cooperating 
with  government  toward  increasing  the  points  of  harmony. 

Some  progress  has  been  made  in  this  direction  in  the  past  few  years 
in  some  States,  through  the  enactment  of  laws  creating  industrial 
commissions,  but  none  of  these  laws  go  to  the  full  extent  required  in 
order  to  carry  out  the  foregoing  principles.  By  observing  the 
strong  and  weak  points  of  these  laws,  as  well  as  those  of  other  States 
and  the  Federal  Government  which  have  not  adopted  similar  laws, 
we  can  draw  certain  conclusions,  which  we  do  in  the  form  of  recom- 
mendations. A  draft  of  a  bill  embodying  most  of  these  recommenda- 
tions was  submitted  to  the  legislatures  of  Colorado  and  New  York 
during  the  legislative  sessions  of  1915  and  wTas  adopted  with  more 
or  less  serious  modifications  and  additions  by  those  legislatures.  The 


I 

I 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  173 

recommendations  below  contain  most  of  the  terms  of  the  foregoing 
draft  and  also  of  improvements  which  seem  essential  to  be  made  in 
the  industrial  commission  laws  of  the  States  and  of  proposed  laws 
for  State  or  Federal  Governments.  Some  of  the  recommendations 
are  based  on  personal  experience  in  the  administration  of  labor  laws. 

INDUSTRIAL  COMMISSIONS. 


1.  State  and  Federal  industrial  commissions  to  be  created  for  the 
administration  of  all  labor  laws.  All  bureaus  or  divisions  dealing 
with  conditions  of  labor,  including  industrial  safety  and  sanitation, 
workmen's  compensation,  employment  offices,  child  labor,  industrial 
education,  statistics,  immigration,  and  so  on,  to  be  placed  under  the 
direction  of  the  commission.  Each  commission  to  consist  of  three 
commissioners  to  be  appointed  by  the  governor  or  President,  as  the 
case  may  be,  with  the  consent  of  the  Senate.  Members  to  be  ap- 
pointed with  the  advice  of  the  advisory  representative  council. 
(See  par.  2.)  The  term  of  each  commissioner  to  be  six  years,  except 
that  the  terms  of  the  commissioners  first  appointed  shall  be  so  ar- 
ranged that  no  two  shall  expire  at  the  same  time.  The  Federal 
Department  of  Labor  to  be  retained  for  educational  and  political  pur- 
poses, and  a  similar  department  might  be  created  in  large  industrial 
States,  such  as  New  York  and  Pennsylvania. 

The  tendency  of  labor  legislation  in  the  States  which  have  given 
attention  to  this  matter  has  been  toward  a  complete  centralization  of 
the  administration  of  the  labor  laws  in  the  hands  of  a  single  depart- 
ment. Wisconsin  in  1911  established  an  industrial  commission  for 
the  administration  of  all  labor  laws,  and  Ohio,  after  one  year  of 
separate  administration  of  the  compensation  law,  created  in  1913  a 
similar  commission,  and  incorporated  the  compensation  commission 
into  an  industrial  commission.  In  New  York  and  Pennsylvania  the 
responsibility  for  the  administration  of  labor  laws  has  been  divided 
between  a  commissioner  of  labor,  who  is  responsible  for  their  en- 
forcement, and  an  industrial  board  of  five  members,  the  sole  duty  of 
which  is  to  make  necessary  rules  and  regulations  having  the  force  of 
law.  In  New  York  there  has  also  been  a  separate  commission  for  the 
administration  of  the  compensation  act.  The  tendency,  however,  is 
strongly  toward  the  industrial  commission  plan,  as  the  New  York 

Elan,  which  was  devised  at  the  time  of  the  reorganization  of  the 
ibor  department  of  that  State  in  1913  and  adopted  in  the  same  year 
by  Pennsylvania  in  an  act  largely  copied  from  the  New  York  law, 
has  already  (1915)  been  given  up  in  the  State  of  its  origin.  The 
New  York  commission  under  the  law  of  1915  consists  of  five  members, 
and  is  charged  with  the  administration  of  all  labor  laws  and  the 
workmen's  compensation  law,  and  also  with  the  duty  of  making  the 
rules  and  regulations  for  carrying  these  laws  into  effect.  In  Penn- 
sylvania a  compensation  act  has  this  year  (1915)  been  enacted,  and, 
while  no  change  has  been  made  in  the  organization  of  the  labor  de- 
partment, the  administration  of  the  compensation  act  has  been  in- 
trusted to  that  department. 

During  the  present  year  (1915)  at  least  five  States  have  enacted 
legislation  for  a  closer  union  of  the  administration  of  their  labor  and 
compensation  laws.  Colorado,  with  serious  modifications,  and  In- 
diana have  enacted  laws  creating  industrial  commissions  similar  to 


174  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

those  of  Wisconsin  and  Ohio.  Nevada  has  created  an  industrial 
commission  of  three  members  for  the  administration  of  its  com- 
pensation act  and  has  conferred  upon  one  of  the  commissioners,  to 
be  designated  as  commissioner  of  labor,  the  duty  of  enforcing  all 
laws  of  the  State  for  the  protection  of  the  working  classes.  In  New 
Jersey,  after  an  unsuccessful  attempt  to  create  an  industrial  com- 
mission, provision  has  been  made  for  two  additional  employees  in 
the  department  of  labor  for  the  purpose  of  correlating  the  work  of 
that  department  with  the  administration  of  the  compensation  act. 

In  California  the  industrial  accident  commission  administers  the 
compensation  act  and  also  laws  dealing  with  safety  in  places  of  em- 
ployment, although  the  labor  bureau  also  has  the  latter  authority; 
and  in  Massachusetts,  while  there  are  still  separate  boards  in  charge 
of  the  labor  department  and  of  the  administration  of  the  compensa- 
tion law,  the  two  boards  sit  jointly  for  the  purpose  of  making  rules 
and  regulations  for  the  prevention  of  industrial  accidents  and  occu- 
pational diseases. 

In  several  States  bills  have  been  introduced  for  the  creation  of  an 
industrial  commission  for  the  administration  of  all  such  laws.  In 
New  Jersey  such  a  bill  was  introduced  by  the  president  of  the  State 
Federation  of  Labor,  who  is  also  a  member  of  the  assembly,  and  in 
Maryland  such  a  bill  was  prepared  and  introduced  at  the  instance  of 
the  State  labor  department.  In  Illinois  the  report  of  the  efficiency 
and  economy  committee  recommended  the  consolidation  of  the  vari- 
ous departments  dealing  with  labor  laws,  including  the  board  admin- 
istering the  compensation  act,  and  in  Missouri  a  legislative  com- 
mittee, after  a  careful  study  of  the  subject,  reported  in  December, 
1914,  in  favor  of  the  enactment  of  a  compensation  law  and  the  crea- 
tion of  an  industrial  commission  to  administer  both  it  and  the  other 
labor  laws  of  the  State.  This  latter  report  is  particularly  impor- 
tant, because  it  represents  the  result  of  a  recent  official  study  of  the 
problem  and  consideration  of  the  experience  of  the  States  which 
have  advanced  labor  laws. 

As  already  explained,  the  fundamental  principle  of  these  recom- 
mendations is  that  the  administration  of  all  the  labor  laws  of  a  State 
shall  be  centralized.  An  illustration  of  the  advantages  is  found  in 
uniting  the  administration  of  the  labor  laws  relating  to  safe  and 
sanitary  conditions  of  employment  with  the  administration  of  the 
workmen's  compensation  laws. 

It  is  probably  unnecessary  at  this  stage  of  the  development  of 
workmen's  compensation  legislation  to  consider  the  question  whether 
there  should  be  a  responsible  officer  or  officers  charged  with  the  ad- 
ministration of  such  laws,  01*  whether  their  administration  should 
be  left  to  individual  initiative  and  the  final  determination  of  courts 
of  law,  already  burdened  with  many  other  and  equally  important 
responsibilities.  That  question  is  settled,  and  the  only  point  is  as  to 
the  character  of  the  administrative  agency.  Both  the  nature  of  the 
compensation  laws  and  the  experience  which  has  been  gained  during 
their  operation  in  many  States  point  to  a  board  or  commission,  in- 
stead of  the  courts,  as  the  best  form  of  administration.  Economy  of 
administration  then  is  secured  if  the  administration  of  safety  laws  is 
placed  in  the  hands  of  the  compensation  commission.  Fewer  highly 
paid  executive  officers  and  other  employees  are  required,  and  there 


I 


REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  175 


is  secured  avoidance  of  duplication  in  the  work  itself.  For  example, 
it  is  essential  to  the  administration  of  both  these  laws  that  em- 
ployers should  be  required  to  make  reports  of  accidents.  On  the 
one  hand  they  furnish  necessary  information  respecting  the  na- 
ture of  accidents  and  the  possibilities  of  prevention;  on  the  other, 
they  are  necessary  in  the  actuarial  work  involved  in  the  administra- 
tion of  compensation.  The  same  is  true  of  the  inspections  which  are 
frequently  necessary  in  the  course  of  the  administration  of  both  laws 
and  in  most  instances  one  inspection  would  serve  both  purposes. 
Furthermore,  the  information  derived  from  hearings  in  compensa- 
tion is  of  great  assistance  to  the  commissioners,  who  are  also  charged 
with  responsibility  of  the  labor  laws  generally,  in  giving  them  a 
broader  view  of  the  problems  with  which  they  are  dealing. 

The  same  kind  of  events  that  have  led  up  to  the  State  industrial 
commission  are  taking  place  in  Federal  legislation.  Already  two 
bills  on  workmen's  compensation  have  been  well  advanced  and  one 
of  them  creates  a  commission  separate  from  the  Department  of  La- 
bor. The  bill  for  compensation  of  employees  of  the  Government 
(63d  Cong.,  2d  sess.,  H.  R.  15222)  takes  the  place  of  the  present  law 
administered  by  the  Department  of  Labor,  and  provides  for  a 
"United  States  Employees'  Compensation  Commission"  consisting 
of  three  commissioners,  no  one  of  whom  shall  hold  any  other  Federal 
office  or  position.  The  other  (63d  Cong.,  1st  sess.,  S.  959),  providing 
for  employees  of  private  employers  in  interstate  commerce,  leaves 
the  administration  of  the  law  to  the  courts,  a  method  that  has  been 
effectually  discredited.  Whether  either  or  both  bills  on  workmen's 
compensation  are  adopted,  they  should  be  united,  as  already  shown 
in  the  case  of  the  States,  under  a  commission  that  administers  the 
safety  laws. 

When  the  Department  of  Labor  was  created  the  important  work 
of  safety  for  mine  workers  was  left  in  the  Department  of  Interior 
under  the  Bureau  of  Mines.  Safety  on  railroads  is  in  the  hands  of 
the  Interstate  Commerce  Commission.  The  Bureau  of  Standards,  of 
the  Department  of  Commerce,  develops  safety  standards  for  electric 
and  other  equipment.  The  Public  Health  Service,  of  the  Treasury 
Department,  investigates  industrial  diseases  and  factory  sanitation. 
The  Bureau  of  Labor  Statistics,  of  the  Department  of  Labor,  in- 
vestigates and  publishes  bulletins  on  accidents  and  diseases  in  va- 
rious industries.  Lately  a  bill  has  passed  the  House  providing  for 
a  safety  bureau  in  the  Department  of  Labor,  with  power  to  investi- 
gate any  or  all  of  the  matters  of  safety  now  carried  on  either  in  that 
department  or  in  any  other  department.  The  seamen's  law  re- 
cently enacted  is  in  the  hands  of  the  Department  of  Commerce,  as- 
sisted by  the  Department  of  Labor.  The  Department  of  Agriculture 
has  a  division  on  rural  housing  and  social  conditions. 

This  overlapping  of  jurisdiction  in  matters  of  industrial  safety 
and  sanitation  has  grown  up  without  any  plan,  according  to  the 
accident  of  such  officials  as  happened  to  be  on  the  ground  or  to  get 
a  hearing  in  Congress;  or  on  account  of  objection  to  placing  authority 
in  one  department  or  another.  And  now,  with  the  prospect  of  Fed- 
eral legislation  for  compensation  for  accidents  and  occupational 
diseases,  one  or  two  more  bureaus  are  likely  to  be  created,  wdth  their 
most  important  object  the  prevention  of  accidents. 


176  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

At  the  same  time  three  great  private  associations  have  sprung  up 
which  are  doing  as  much  or  more  for  safety  than  all  the  State  and 
Federal  Governments  combined.  The  Conference  Board  of  National 
Allied  Safety  Organizations,  composed  of  representatives  from  the 
National  Association  of  Manufacturers,  the  National  Founders'  As- 
sociation, the  National  Metal  Trades  Association,  and  the  National 
Electric  Light  Association,  has  begun  the  standardization  of  safety 
devices  for  millions  of  employees,  regardless  of  any  standards  which 
State  or  Government  officials  may  set  up. 

The  National  Council  of  Safety,  composed  of  the  safety  experts  of 
most  of  the  large  corporations  of  the  country  and  of  representatives 
of  labor,  has  developed  an  extensive  campaign  of  accident  prevention. 
The  Workmen's  Compensation  Service  Bureau,  supported  by  the  lia- 
bility-insurance companies,  is  doing  expert  work  of  the  highest 
order  in  safety  devices  and  processes  for  the  assistance  of  such 
employers  as  are  policy  holders  in  those  companies. 

With  these  three  national  organizations  representing  the  employ- 
ing interests,  with  at  least  five,  and  the  prospect  of  seven,  bureaus 
representing  the  Federal  Government,  and  with  similar  agencies  more 
or  less  developed  in  the  States,  all  of  them  working  on  the  same  prob- 
lem of  compensation  for  accidents  and  prevention  of  accidents,  the 
time  is  ripening  for  some  kind  of  correlation  and  uniformity.  It 
can  not  be  expected  that  Congress  and  the  people  will  long  be  satis- 
fied with  this  expensive  and  wasteful  disorganization  of  the  national 
energies  that  are  directed  to  the  great  work  of  safety  and  compen- 
sation. Just  as  the  States  are  moving  toward  centralization  under 
industrial  commissions,  so  the  same  problem  must  force  the  Federal 
Government  toward  not  only  centralization  of  its  own  work  but  cor- 
relation with  the  States  and  with  private  organizations. 

It  does  not  follow  that  all  of  the  Federal  bureaus  dealing  with 
safety  and  health  should  be  bodily  taken  from  their  several  depart- 
ments and  transferred  to  an  industrial  commission.  There  may  be  cases 
where  their  work  on  industrial  safety  and  health  is  tied  up  with  their 
other  work.  It  is  only  necessary  that  the  several  departments  should 
be  required  by  law  to  discontinue  any  overlapping  or  conflict  of 
jurisdiction,  and  that  an  industrial  commission  should  have  authority 
to  bring  them  all  together  into  a  national  council  of  industrial  safety 
and  health  and  require  them  to  agree  on  a  definite  plan  of  dividing 
up  the  work  and  cooperating  with  each  other  and  with  private  asso- 
ciations organized  for  similar  work.  Other  comments  will  be  found 
under  paragraph  3. 

ADVISORY  REPRESENTATIVE  COUNCIL. 

2.  An  advisory  representative  council  consisting  of  the  Secretary 
of  Commerce  and  the  Secretary  of  Labor  and  of,  say,  10  employers 
(including  farmers)  and  10  representatives  of  labor  unions  (includ- 
ing women).  The  representatives  on  the  council  to  be  selected  from 
lists,  not  including  lawyers,  submitted  by  recognized  employers'  asso- 
ciations in  the  State  or  in  the  Nation,  as  the  case  may  be,  such,  for 
example,  as  State  associations  of  manufacturers,  the  National  Metal 
Trades  Association,  the  National  Founders'  Association,  associations 
of  coal  operators,  of  railroad  presidents,  of  brewers,  of  farmers' 


I 


REPORT  OF   COMMISSION   OX   INDUSTRIAL   RELATIONS.  177 


organizations,  etc.  The  representatives  of  employees  to  be  selected 
from  lists  submitted  by  the  American  Federation  of  Labor,  the  rail- 
road brotherhood,  the  Women's  Trade  Union  League,  and  independent 
organizations.  In  all  cases  either  the  associations  entitled  to  repre- 
sentation should  be  named  in  the  law,  or  provision  should  be  made 
rhereby  the  governor  or  President,  upon  investigation,  shall  name 
rgaiiizations  which  are  considered  representative  by  organized  em- 
ployer's and  organized  employees  themselves  and  permit  them  to  name 
their  representatives.  Similar  provision  in  case  an  organization 
ceases  to  exist  or  to  be  representative.  Any  organization  to  be  entitled 
to  recall  its  representative  on  notice.  The  representative  council 
to  be  appointed  by  the  governor  or  the  President  before  the  appoint- 
ment of  the  commission  and  the  governor  or  the  President  to  call  it 
together  and  to  consult  with  it  regarding  the  names  proposed  to  be 
nominated  for  commissioners.  The  Industrial  Commission  to  invite 
also  a  limited  number,  say,  10,  of  individuals  or  representatives  of 
organizations  including  persons  especially  interested  in  unorganized 
labor  arid  representatives  of  such  organizations  as  the  International 
Association  for  Labor  Legislation,  the  National  Child  Labor  Com- 
mittee, and  the  Consumers'  League  and  individual  employers  and 
employees,  as  may  be  advisable  for  their  assistance,  to  be  members 
of  the  advisory  council.  The  council  to  take  no  vote  on  any  subject 
except  procedure  and  to  have  no  veto  on  any  act  of  the  Industrial 
Commission.  Nominal  compensation  or  no  compensation  to  members, 
with  necessary  expenses.  The  representative  council  to  effect  its 
own  organization  and  call  meetings  independent  of  the  commission, 
to  be  provided  with  a  secretary  and  needed  clerical  assistance,  to  hold 
meetings  perhaps  quarterly  and  on  call,  to  keep  and  publish  records 
of  its  proceedings.  The  Industrial  Commission  to  be  required  to 
submit  all  proposed  rules,  regulations,  and  publications  to  the  repre- 
sentative council,  allowing  sufficient  time  for  examination  and  dis- 
cussion, and  to  publish  any  protest  or  criticism  filed  by  any  member 
of  the  council,  along  with  the  commission's  own  publication. 

This  recommendation  is  an  extension  of  a  principle  which  is  left- 
optional  in  several  State  commission  laws,  but  the  mandatory  feature 
has  been  partially  adopted  by  law  in  New  York.  The  recommenda- 
tion creates  a  body  similar  to  the  Superior  Councils  of  Labor  in 
France,  Belgium,  and  Italy,  the  Industrial  Council  in  England,  and 
many  councils  of  private  representative  citizens  wTho  assist  Govern- 
ment officials  in  Germany.  In  Wisconsin  the  appointment  of  a 
council  is  optional  with  the  commission,  but  it  has  been  appointed 
for  several  purposes,  and  this  policy  has  been  demonstrated  to  be  the 
most  effective  of  all  that  the  commission  has  adopted.  The  omission 
by  that  commission  to  adopt  it  at  times  has  been  a  source  of  severe 
and  just  criticism,  and  accounts  for  the  granting  of  permits  against 
which  objections  are  rightly  made.  In  New  York  the  representa- 
tive council  is  mandatory,  but  the  selections  are  made  by  the  gov- 
ernor, and  are  therefore  liable  to  be  political  and  nonrepresentative. 
For  these  reasons  it  is  recommended  that  the  council  not  only  be 
mandatory,  as  in  New  York,  but  that  no  action  of  the  commission, 
except  in  case  of  specified  emergencies,  shall  be  valid  and  no  pub- 
lication shall  be  issued  unless  previously  submitted  to  the  representa- 
tive council.  In  this  respect -the  advisory  representative  council 
38819°— 16 12 


178  REPORT  OE  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

would  have  powers  in  excess  of  those  of  similar  councils,  except  per- 
haps the  Superior  Council  of  Belgium. 

Appointment  by  the  governor,  President,  or  Industrial  Commis- 
sion is  required  in  order  that  members  may  receive  necessary  ex- 
penses. Lawyers  are  excluded  because  the  council  should  be  com- 
posed of  persons  with  practical  experience  in  industry. 

The  history  of  governmental  commissions  and  departments  has 
often  been  the  appointment  of  men  on  the  recommendation  of  poli- 
ticians or  special  interests  or  the  accident  of  personal  acquaintance. 
An  executive,  in  looking  around  for  competent  appointees,  is  often 
at  a  disadvantage  because  he  can  not  get  impartial  and  disinterested 
men  to  accept,  or  because  he  does  not  have  impartial  and  competent 
advice  in  his  selections.  To  the  proposed  Industrial  Commissions 
is  given  the  most  serious  problem  before  the  American  people.  Al- 
most everything  turns  on  the  kind  of  men  appointed.  They  must 
be  men  not  only  competent  but  having  the  respect  of  the  great  op- 
posing interests.  Their  position  is  that  of  a  kind  of  mediator  as 
well  as  of  administrator.  Such  appointments  should  not  be  made 
in  haste,  nor  in  the  secret  of  the  executive's  accidental  advisors. 
They  should  be  considered  publicly,  and  especially  by  the  opposing 
interests  whose  fortunes  will  be  committed  in  great  part  to  their 
hands.  The  governor  or  President  can  not,  of  course,  be  bound  by 
the  action  of  the  council,  but  he  can  be  required  to  get  their  advice 
on  names  proposed. 

It  is  intended  that  the  members  of  the  commission  itself  should 
not  be  representative  of  either  employers  or  employees,  but  that  they 
should  have  the  confidence  of  both  sides.  This  is  expected  to  follow 
from  the  requirement  that  the  governor  or  President  should  consult 
the  council  before  making  his  nominations  of  commissioners.  In 
this  way,  what  is  known  as  "the  public"  would  be  represented  in 
part  by  the  commission,  while  capital  and  labor  would  be  represented 
in  the  council. 

By  this  method  it  can  be  expected  that  capable  men  may  be  at- 
tracted from  their  private  occupations  into  public  service  as  mem- 
bers of  the  commission.  Usually  the  kind  of  men  required  for  such 
positions  dread  the  political  and  personal  attacks  that  are  connected 
with  public  office.  But  it  would  be  difficult  for  an  eminent  man  to 
resist  the  call  to  public  office  when  he  has  the  united  invitation  of 
the  President,  the  employers,  and  the  labor  unions  of  the  country. 

The  representative  council  has  no  veto  power,  but  is  intended 
merely  as  a  cooperative  body  representing  employers,  employees,  the 
public  as  it  is  represented  by  the  Secretaries  of  Commerce  and  Labor, 
and  individuals  selected  by  the  commission.  Its  duties  are  purely 
advisory.  Its  purpose  is  not  only  to  give  the  governor  or  President 
and  the  commission  the  benefit  of  advice  and  to  bring  together  for 
conference  representative  labor  men  and  employees,  but  to  guarantee 
as  far  as  possible  that  all  appointments  (par.  3),  all  investigations 
and  publications  (par.  4),  all  rules  and  regulations  (par.  5),  and 
other  acts  of  the  commission,  shall,  before  they  are  published  or  be- 
come valid,  be  under  the  continuous  supervision  of  the  recognized 
leaders  of  organized  capital  and  organized  labor,  and  public  repre- 
sentatives. 

No  requirement  is  made  for  the  appointment  of  advisory  experts, 
such  as  lawyers,  engineers,  and  physicians.  These  may  be  appointed 


I 


REPORT  OP   COMMISSION   ON  INDUSTRIAL  RELATIONS.  179 

by  the  Industrial  Commission  as  members  of  the  third  interest  on 
the  council,  but  it  is  found  in  practice  that  the  services  of  consulting 
experts  are  secured  without  expense  to  the  State  if  representative 
employers  and  employees  have  a  part  in  the  advisory  council.  This 
is  attended  to  because  the  employer  and  employee  representatives 
themselves  have  not  the  technical  knowledge  and  can  not  give  the 
time  necessary  to  consider  all  details,  but  must  consult  experts  in 
whom  they  have  confidence.  This  they  do,  and  are  thereby  prepared 
to  discuss  intelligently  the  acts  of  the  commission.  The  council  and 
the  commission  can,  of  course,  call  in  such  experts  to  thefr  con- 
ferences at  any  time. 

The  employer  and  employee  members  of  the  advisory  council 
should  be  strictly  representative  and  responsible  to  the  organizations 
represented.  For  this  reason  the  organizations  and  not  the  Govern- 
ment should  pay  the  salaries  of  the  members.  The  result  as  shown  in 
Wisconsin,  where  not  even  expenses  are  paid,  is  that  the  represen- 
tatives are  usually  business  agents  of  the  unions  and  large  employers 
selected  by  the  employers'  associations. 

The  council  should  organize  with  its  own  officers,  independent  of- 
the  commission,  but  should  hold  its  conferences  with  members  of  the 
commission  or  with  members  of  the  staff.  It  should  appoint  expert 
advisory  committees  as  needed  for  different  subjects,  such  as  safety, 
employment  offices,  etc.  It  should  be  provided  with  clerical  and 
other  help  from  the  staff  of  the  commission. 

Since  the  powers  of  the  council  are  only  advisory  it  is  not  essential 
that  it  should  vote  on  any  questions  except  procedure.  Hence  it  is 
not  necessary  to  have  equal  representation  of  any  interests  or  full 
attendance  at  all  meetings.  Each  member  should  be  furnished  by 
mail  with  all  proposals  and  proposed  publications  of  the  industrial 
commission. 

For  the  reasons  just  cited  it  is  not  necessary  that  the  commission 
itself  should  consist  of  more  than  three  members.  They  are  not 
expected  in  the  larger  States  or  in  the  Federal  Government  to  attend 
to  details  of  administration.  Their  duties  will  be  mainly  those  of 
consultation  and  conferences  with  the  council,  supervision  of  the 
executive  heads  of  divisions  (par.  3),  and  public  hearings. 
.  This  advisory  council  provides  effective  publicity  for  every  act  of 
the  commission.  The  ordinary  publicity  required  by  law  is  that  of  a 
public  hearing,  and  is  limited  to  rules  and  regulations  which  are  to 
have  the  effect  of  law.  Such  public  hearings  have  become  mere  legal 
formalities,  at  which  usually  lawyers  appear  for  each  side  and  little 
or  no  opportunity  is  given  for  the  two  sides  to  get  together  on  points 
where  they  can  agree.  The  commission  then  retires  and  issues  such 
rules  and  regulations  as  it  may  choose.  These  formal  public  hearings  - 
are  not  even  required  by  law  in  some  cases,  but  (par.  5)  the  recom- 
mendation provides  that  before  the  public  hearing  the  employers 
and  employees,  with  the  commission  and  its  staff,  shall  have  con- 
sidered and  drafted  the  proposed  rules  so  that  when  it  comes  to  the 
public  hearing  they  are  present  to  explain  and  defend  them.  If 
objections  are  raised  at  the  public  hearing  the  proposed  rules  are 
referred  back  to  the  advisory  council  and  the  staff  of  the  commission 
for  reconsideration  before  being  finally  approved  and  issued  as  the 
legal  act  of  the  commission.  If  no  public  hearing  is  required  by  law, 
rules  can  not  be  issued  except  on  advice  of  the  representative  council. 


180  REPORT  OF  .COMMISSION   OK   INDUSTRIAL  RELATIONS. 

In  this  way  an  effective  publicity  is  secured  by  a  thorough  considera- 
tion of  the  rules,  because  both  those  who  are  to  be  compelled  by  law  to 
obey  the  rules  and  those  in  whose  interest  they  are  issued  have 
assisted  in  drafting  them. 

Additional  comments  will  be  found  under  paragraph  3. 

CIVIL  SERVICE  AND   COMMENTS  ON    PRECEDING   PARAGRAPHS. 

3.  The  commission  to  appoint  a  secretary,  bureau  chiefs,  or  chiefs 
of  divisions,  and  such  other  employees  as  may  be  necessary,  all  of 
them  to  be  under  civil-service  rules.  Provision  to  be  made  for  the 
advisory  representative  council  or  a  committee  named  by  it,  repre- 
senting both  employers  and  employees,  to  assist  the  civil  service  com- 
mission in  conducting  examinations,  except  for  clerical  positions, 
and  making  it  mandatory  011  the  civil  service  commission  to  appoint 
these  representatives  on  its  examining  boards.  Members  of  advisory 
council  while  serving  on  such  boards  to  receive  extra  compensation. 
If  there  is  no  civil  service  commission  in  the  State,  then  the  advisory 
council  shall  cooperate  with  the  industrial  commission  in  the  exami- 
nations. The  commission  afterwards  to  make  its  appointments  from 
the  eligible  list  of  those  who  pass  the  examinations.  A  graded  system 
of  salaries  and  promotions  to  be  adopted,  by  which  the  members  of 
the  staff  may  rise  to  the  position  of  heads  of  bureaus  or  divisions, 
where  they  would  receive  salaries  equivalent,  if  necessary,  to  those 
received  by  the  commissioners.  Any  proposed  removal  of  subordi- 
nates to  be  brought  before  the  advisory  council  before  action. 

Many  of  the  features  of  this  section  are  adopted  in  the  New  York 
act,  but  the  examination  by  employers  and  employees  is  not  manda- 
tory on  the  Civil  Service  Commission,  and  a  few  of  the  chief  posi- 
tions are  exempt  from  civil-service,  rules.  The  Civil  Service  and 
Industrial  Commissions  of  Wisconsin  have  practiced  this  method  of 
examination  and  appointment  for  employment  offices  and  for  chiefs 
of  divisions,  although  not  required  by  law. 

Objection  sometimes  is  made  to  civil-service  examinations  as  being 
impractical  and  theoretical.  Indeed,  civil-service  examinations  are 
likely  to  be  impractical  if  conducted  by  experts.  These  objections 
can  be  avoided  in  the  examinations  for  these  positions  by  requiring 
that  the  Civil  Service  Commission,  if  there  is  one,  shall  cooperate 
with  the  representative  council.  The  examinations  would  thus  be 
conducted  with  the  aid  of  men  thoroughly  acquainted  with  all  the 
practical  difficulties  involved  in  the  duties  of  the  positions  to  be  filled. 
By  making  use  of  oral  or  written,  assembled  or  nonassembled,  com- 
petitive or  noncompetitive  examinations,  as  best  suited  to  the  partic- 
ular purposes,  it  should  be  possible  to  obtain  all  the  advantages  of 
the  civil-service  system  with  few  of  its  disadvantages. 

Furthermore,  it  is  not  enough  that  examinations  for  positions 
under  the  Industrial  Commission  should  secure  efficiency  and  per- 
manency; it  is  even  more  important  that  they  should  secure  impar- 
tiality. The  Industrial  Commission  itself  and  its  entire  staff  are 
looked  upon  as  mediators  in  adjusting  the  administration  of  labor 
laws  to  the  actual  conditions  of  industry.  It  is  essential  that  both 
sides  should  have  confidence  in  the  staff  of  the  commission,  and  there- 
fore that  both  sides  should  have  a  voice  in  its  selection. 


REPORT  OF   COMMISSION    OX   INDUSTRIAL   RELATIONS.  181 

This  provision  for  representatives  of  employers  and  employees  on 
examining  boards  should  not  be  left  optional  with  Civil  Service  Com- 
missions or  the  Industrial  Commission,  but  should  be  mandatory. 
It  has  been  found  that  several  Civil  Service  Commissions  object  to 
this  provision,  because  they  wish  to  retain  unqualified  authority  for 
conducting  examinations  and  making  up  eligible  lists.  This  is  one 
of  the  features  of  bureaucracy  which  should  not  be  permitted  where 
such  vital  issues  as  the  contest  between  capital  and  labor  are  at  stake. 
The  provision  in  the  recommendation  does  not  prevent  Civil  Service 
Commissions  from  appointing  experts  on  their  examining  boards; 
it  merely  requires  them  also  to  appoint,  in  addition,  the  recognized 
representatives  of  the  interests  who  have  previously  been  nominated 
by  the  interests  themselves. 

At  the  present  time  secretaries  and  bureau  chiefs  in  the  Federal 
Government  are  exempt  from  civil-service  rules,  and  are  usually 
appointed  by  the  President  and  confirmed  by  the  Senate.  This  is  a 
serious  discouragement  to  competent  subordinates,  who  are  thereby 
prevented  from  rising  by  promotion  to  the  higher  positions  in  their 
bureaus,  and  who  see  less  competent  political  appointees  brought  in 
over  their  heads  as  well  as  frequently  changed. 

These  recommendations  are  intended  to  place  the  highest  positions 
under  the  Industrial  Commission  on  an  equivalent  with  the  com- 
missioners themselves.  It  would  be  unfortunate  and  impracticable, 
except  in  smaller  States,  if  the  commissioners  were  required  to  give 
their  entire  time  to  the  details  of  administration.  This  is  the  case 
where  a  commission  must  perform  as  many  functions  as  are  required 
in  the  large  State  and  Federal  Government  commissions.  This  they 
would  be  compelled  to  do  if  their  chiefs  of  divisions  were  frequently 
changed,  as  under  the  present  system.  The  chiefs  of  divisions  and 
bureaus,  both  under  Federal  and  under  State  commissions,  should 
be  as  competent  as  the  commissioners  to  deal  with  employers  and  em- 
ployees, and  much  more  competent  in  dealing  with  subordinates.  In 
foreign  countries  the  office  of  factory  inspector,  as  well  as  all  other 
offices  dealing  with  the  relations  of  employers  and  employees,  are 
considered  as  professions.  In  some  of  those  countries  the  universities 
provide  training  courses  and  lectures  on  the  subjects  for  which  the 
officials  are  preparing,  and  these  are  required  to  be  taken  as  a  part 
of  the  civil-service  rules.  The  appointee  then  serves  as  an  appren- 
tice in  the  department  and  by  promotion  may  reach  the  highest  po- 
sition. As  a  result  a  high  grade  of  inspector  is  obtained.  Only  when 
the  officers  and  employees  of  the  commissions  have  such  opportunities 
as  these  for  a  life  work,  provided  they  are  impartial  as  between  em- 
ployers and  employees,  can  officials  be  interested  in  preparing  them- 
selves for  the  work,  or  academies  like  those  at  West  Point  and 
Annapolis  be  adopted  for  the  training  of  civil  servants. 

The  advisory  representative  council,  proposed  in  paragraph  2, 
also  protects  the  administration  of  labor  laws  from  the  just  fear  of 
government  by  a  bureaucracy.  There  must  be  officials  if  labor  laws 
are  to  be  enforced.  The  courts  can  not  be  relied  upon  alone,  because 
prosecution  can  be  begun  only  by  private  individuals.  Consequently 
administrative  officers  and  inspectors  have  been  provided  to  initiate 
prosecutions.  These  officials  constitute  a  necessary  bureaucracy,  if 
the  laws  are  enforced.  But  it  can  not  be  asserted  that  the  present 


182  REPORT  OF   COMMISSION   ON"  INDUSTRIAL  RELATIONS. 

system  of  political  appointments  of  inspectors  avoids  the  evil  of 
bureaucracy.  The  essential  evil  of  bureaucracy  is  not  so-called  per- 
manency of  tenure,  but  the  refusal  of  the  official  to  take  advice  from 
laymen.  The  loudest  agitator  against  bureaucracy  becomes  at  once 
the  most  confirmed  bureaucrat  when  he  gets  into  office,  because  he 
determines  to  run  his  office  in  his  own  way,  regardless  of  the  advice 
of  those  who  are  compelled  to  obey  his  orders.  In  this  sense  the 
American  officeholder  is  much  more  of  a  bureaucrat  than  are  the 
European  officials,  who  are  compelled  to  consult  the  superior  councils 
of  labor  or  industrial  councils  of  representatives  of  interests.  It  is 
for  this  reason  that  the  legislatures  and  Congress  should  make  it 
mandatory  that  the  representative  advisory  councils  should  be 
created  and  that  the  industrial  commissions  and  their  staffs  should 
confer  with  them  before  any  act  of  the  commission  can  have  the 
validity  of  law.  It  is  also  necessary  that  the  Civil  Service  Com- 
mission should  appoint  representatives  from  the  council  on  its 
examining  boards  before  any  valid  eligible  list  for  appointment  of 
subordinates  can  be  made. 

Another  charge  against  civil-service  rilles  is  the  objection  to  per- 
manency of  tenure  and  the  inability  to  get  rid  of  an  official  who 
adheres  to  outworn  methods.  This  objection  often  has  force,  but  the 
remedy  is  not  that  of  returning  to  political  and  partisan  appoint- 
ments or  frequent  removals  when  changes  occur  in  the  political 
branch  of  Government.  Officials,  under  most  civil-service  laws,  can 
be  removed  at  any  time,  provided  reasons  be  given  and  no  civil 
service  commission  should  have  authority  to  reinstate  any  official,  as 
is  the  mistaken  policy  of  some  States.  Permanency  of  tenure  means 
only  permanency  on  "good  behavior."  The  principal  reason  why 
officials  adhere  to  old  methods  is  because  there  is  no  continuous 
supervising  authority  in  a  position  to  force  them  into  new  and  better 
methods.  The  provision  for  an  advisory  council  with  which  the 
officials  are  compelled  to  confer  has  been  found  to  be  the  most  effec- 
tive method  of  compelling  such  officials  to  keep  up  with  the  changing 
conditions  that  require  new  methods.  If,  then,  they  are  obstructive 
or  incompetent  to  do  this,  there  is  good  cause  for  removal. 

COMMISSIONS  AND   CLASS    CONFLICTS. 

There  are,  of  course,  criticisms  and  objections  raised  against  indus- 
trial and  other  commissions.  It  is  not  claimed  here  that  they  always 
work  well.  But  they  work  better  than  the  system  they  have  dis- 
placed, and  they  have  been  found  to  be  the  only  alternative  where 
legislation  attempts  to  regulate  the  relations  of  great  conflicting  and 
hostile  interests.  Many  States  and  Congress  have  been  forced  by 
actual  conditions  to  create  railroad  and  interstate  commerce  com- 
missions in  order  to  take  the  details  of  the  contest  between  railroads 
and  shippers  as  far  as  possible  out  of  the  legislatures  and  the  courts. 
Congress  has  been  compelled,  after  25  years  of  futile  antitrust 
legislation,  to  turn  over  the  contest  between  trusts  and  their  com- 
petitors or  customers,  to  a  Federal  trade  commission.  The  contest 
between^ban kers  and  the  commercial  and  business  classes  that  depend 
on  credit  for  their  existence  has  been  turned  over  to  the  Federal 
Reserve  Board. 


EEPOBT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  183 

The  contest  between  capital  and  labor  is  more  serious  than  any 
of  the  other  contests.  Since  the  year  1877  it  has  frequently  resulted 
practically  in  civil  war,  with  the  army  or  militia  called  in  to  sup- 
press one  side  or  the  other,  according  to  the  will  of  the  executive. 
It  is  claimed  by  some  that  this  contest  is  irrepressible  and  will  end 
in  revolution,  and  at  least  it  is  plain,  when  the  military  power  is 
called  upon  to  decide  a  contest,  that  the  ordinary  machinery  of 
government,  which  is  fairly  successful  in  other  contests,  has  broken 
down. 

It  is  not  a  solution  of  the  contest  to  claim  that  these  outbreaks 
are  caused  solely  by  agitators  and  have  no  foundation  in  conditions 
that  need  remedying.  Such  a  solution,  carried  to  its  limit,  means 
the  suppression  of  free  speech,  free  press,  and  free  assembly,  which 
can  be  accomplished  only  by  military  power.  That  there  are  con- 
ditions which  need  remedying  is  shown  by  the  enormous  amount  of 
labor  legislation  of  the  past  three  decades,  and  the  enormous  amount 
cf  new  legislation  proposed.  This  legislation  has  come  from  the 
free  discussion  and  investigation  of  actual  labor  conditions,  and  if 
there  is  no  effective  way  for  this  discussion  to  be  carried  on  and  the 
alleged  facts  to  be  verified  or  disproved,  then  the  result  must  be  an 
excess  of  unfounded  and  impractical  agitation  mixed  up  with  real 
grievances.  There  are  unbridled  agitators  of  this  kind  on  both  sides 
of  the  contest,  and  it  is  only  when  the  two  sides  are  brought  together, 
and  their  charges,  countercharges,  and  alleged  grievances  are  boiled 
down  by  investigation  to  the  residuum  of  facts,  that  mere  unfounded 
agitation  can  be  expected  to  give  way  to  deliberations  on  remedies  for 
recognized  evils. 

This  does  not  mean  that  both  sides  can  be  made  to  agree  on 
remedies  for  all  evils  and  grievances,  even  after  they  have  agreed 
on  the  facts.  It  means  only  that  there  is  found  to  be  a  much  larger 
field  than  was  supposed  where  they  can  agree,  and  it  is  worth  while 
for  legislation  to  provide  the  means  for  bringing  both  sides  together 
for  a  continuous  search  after  the  common  points  of  agreement.  When 
they  have  agreed  upon  and  disposed  of  less  disputatious  points,  they 
are  in  a  position  to  go  on  to  those  disputed  points  which  had  been 
thought  irreconcilable.  This  is  the  main  reason  for  creating  Indus- 
trial Commissions  with  adequate  powers  of  impartial  investigation, 
with  conferences  and  discussions  by  both  sides,  and  with  power  to 
decide  on  regulations  and  then  to  enforce  them.  (Par.  5.) 

While  some  of  the  functions  outlined  for  the  proposed  Industrial 
Commission  are  now  being  performed  by  the  Department  of  Labor 
through  its  bureaus,  it  is  not  proposed  that  the  department  be 
abolished.  (Par.  1.)  It  is  even  proposed  that  in  large  industrial 
States  a  similar  department  might  be  created  in  addition  to  the  In- 
dustrial Commission.  In  nonindustrial  States,  where  the  labor  de- 
partment is  mainly  educational  and  not  administrative,  there  would, 
of  course,  be  no  occasion  for  an  Industrial  Commission.  Such  occa- 
sion would  usually  first  arise  in  case  a  workmen's  compensation  law 
were  enacted. 

We  take  it  to  be  commonly  accepted  that  a  department,  with  its 
head  having  a  seat  in  the  Cabinet,  is  chiefly  designed  to  advise  and 
aid  the  administration  in  formulating  its  policy  toward  the  interests 
in  charge  of  that  department,  and  to  foster  and  promote  the  welfare 


184  JKKPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS. 

of  those  interests.  To  be  sure,  other  responsibilities  are  intrusted 
to  the  department,  but  the  foregoing  are  its  prime  duties. 

That  Congress  intended  it  to  be  so  is  manifested  in  the  statutes 
creating  the  different  departments.  Thus  the  law  establishing  the 
Department  of  Commerce  declares  that  it  should  foster,  promote,  and 
develop  the  foreign  and  domestic  commerce,  the  mining,  manufac- 
turing, shipping,  and  fishery  industries,  and  the  transportation  facili- 
ties of  the  United  States.  Likewise  in  creating  the  Department  of 
Labor  in  1885,  Congress  stated  its  purpose  to  be  the  diffusion  of 
"  useful  information  on  subjects  connected  with  labor,  in  the  most 
general  and  comprehensive  sense  of  that  word,  arid  especially  upon 
its  relation  to  capital,  the  hours  of  labor,  the  earnings  of  laboring 
men  and  women,  and  the  means  of  promoting  their  material,  social, 
intellectual,  and  moral  prosperity."  Congress  reiterated  its  position 
when  it  raised  the  Department  of  Labor  to  Cabinet  rank  in  declar- 
ing that  its  purpose  should  be  "to  foster,  promote,  and  develop  the 
welfare  of  the  wage  earners  of  the  United  States,  to  improve  their 
working  conditions,  and  to  advance  their  opportunities  for  profitable 
employment."  It  is  also  mandatory  upon  the  Secretary  "to  make 
such  special  investigations  and  reports  as  he  may  be  required  to  do 
by  the  President,  or  by  Congress,  or  which  he  himself  may  deem 
necessary." 

Congress  has  not  only  declared  that  it  regards  Cabinet  officers  or 
department  heads  as  the  personal  choice  of  the  President,  whom 
they  are  to  assist  in  formulating  his  executive  policy,  but  it  has  also 
accepted  it  in  practice.  This  is  illustrated  by  the  fact  that  the  Senate, 
even  when  controlled  by  an  opposition  party,  usually  ratifies  the 
President's  nominations  promptly  and  without  objections. 

When  influential  economic  groups  feel  that  the  Government  can  be 
of  assistance  in  promoting  their  interests,  they  set  about  to  bring 
political  pressure  to  bear  upon  Congress  to  create  a  department 
that  will  concern  itself  with  their  welfare.  Thus  the  Department 
of  Agriculture  was  created  in  1880,  largely  through  the  efforts  of 
the  National  Grange  and  other  farmers'  organizations.  In  the  same 
way  the  Department  of  Commerce  was  created  on  the  petition  of  the 
business  and  manufacturing  interests. 

Of  course,  the  different  departments  have  also  been  intrusted  with 
administrative  duties.  The  Department  of  Agriculture  administers 
the  meat-inspection  service,  the  Department  of  Commerce  the  steam- 
ship-inspection service,  the  Department  of  Labor  the  immigration 
service,  and  so  on.  However,  whenever  an  acute  administrative 
problem  arises,  owing  to  an  intense  conflict  between  two  opposing 
economic  interests,  and  requiring  a  disinterested  enforcement  of  law, 
it  has  usually  not  been  intrusted  to  one  of  these  political  depart- 
ments. Hence,  when  Congress  turned  its  attention  to  the  dispute 
between  the  railroads  and  the  great  majority  of  shippers,  it  did  not 
create  a  Department  of  Commerce  to  administer  the  law,  but  instead 
intrusted  it  to  the  Interstate  Commerce  Commission,  a  disinterested 
and  nonpolitical  body.  Again,  when  Congress  determined  upon 
legislation  to  deal  with  "  the  new  economic  problem  involved  in  the 
increased  tendency  toward  concentrated  ownership  of  the  large  in- 
dustries of  the  country,"  no  one  even  thought  of  suggesting  that  this 
mutter  be  turned  over  to  the  Department  of  Commerce.  On  the  con- 
trary, without  a  single  objection,  an  independent  administrative  com- 


I 
I 


REPORT  OF   COMMISSION   OX   INDUSTRIAL   RELATIONS.  185 


mission,  the  Federal  Trade  Commission,  was  created  to  enforce  the 
legislation.  The  same  is  true  with  the  Federal  Reserve  Board.  Con- 
gress has  also  applied  this  policy  to  the  labor  problem.  The  first 
important  administrative  act  directly  affecting  capital  and  labor  was 
not  assigned  to  the  Department  of  Labor  for  execution,  but  to  a  dis- 
interested and  nonpolitical  board.  We  refer  to  the  Newlands  Act  of 
1913,  and  preceding  acts  relating  to  arbitration  of  labor  disputes  on 
railroads.  When  an  effort  was  made  to  place  the  administration  of 
this  act  under  the  Department  of  Labor,  both  the  railroad  companies 
and  the  railroad  brotherhoods  opposed  and  prevented  the  change. 

We  are  of  the  opinion  that  if,  in  dealing  with  the  labor  problem, 
this  policy  is  carried  out  consistently,  considerable  of  the  industrial 
unrest  will  be  allayed.  We  believe  that  it  should  be  the  conscious 
policy  of  Congress  to  separate  the  policy-determining  functions  from 
the  administrative  functions.  The  Department  of  Labor  should  be 
intrusted  with  investigations  that  would  aid  the  President  and  his 
administration  in  determining  upon  a  labor  policy.  It  should  also 
be  the  educational  medium  through  which  the  country  is  to  be  in- 
formed on  the  various  labor  issues  that  need  solution  or  have  not  yet 
been  legislated  upon.  As  a  matter  of  fact,  this  has  been  the  depart- 
ment's chief  and  most  effective  activity.  A  glance  at  the  list. of  pub- 
lications of  the  department  shows  the  influence  it  has  had  as  a  pioneer 
in  labor  legislation  in  this  country.  The  present  unanimity  of 
opinion  in  favor  of  workmen's  compensation,  safety  and  sanitation, 
vocational  training  and  employment  bureaus,  is  largely  due  to  its 
having  concentrated  upon  educating  the  public  to  the  need  of  such 
legislation.  And  the  department  wisely  continues  to  fulfill  its  chief 
mission  by  pointing  the  way  to  future  improvement  of  the  conditions 
of  labor.  Its  recent  publications  aim  to  enlighten  and  crystallize 
public  opinion  on  such  mooted  but  vital  questions  as  sickness  and  unem- 
ployment insurance,  old-age  pensions, housing  of  workingmen,  coopera- 
tion, employers'  welfare  work,  home  and  factory  conditions  of  women 
and  children.  To  make  its  work  still  more  effective  the  department 
has  begun  issuing  a  monthly  review  which  will  supply  information 
on  all  questions  affecting  labor.  We  have  no  doubt  that  with  the  aid 
of  the  Department  of  Labor,  legislation  upon  these  subjects  will  be 
secured  sooner  than  otherwise. 

On  the  other  hand,  when  public  opinion,  through  legislation,  has 
determined  upon  a  policy,  it  is  vital  to  its  success  that  it  be  adminis- 
tered by  disinterested  persons  not  connected  with  a  political  depart- 
ment. This  is  necessary  in  order  to  obtain  the  mutual  and  voluntary 
cooperation  of  employers  and  employees,  and,  unless  they  are  assured 
of  a  disinterested  administration  of  the  law,  they  will  be  reluctant  to 
assist  in  its  successful  enforcement.  Naturally  a  department  which 
initiates  and  advocates  new  legislation  is  bound  to  antagonize  those 
who  are  not  in  accord  with  its  views.  It  is  futile  to  expect  the  De- 
partment of  Labor  to  get  the  good  will  and  cooperation  of  those 
whom  it  successfully  defeated  in  the  legislative  battle.  We  must  re- 
member that  the  department  is  constantly  advocating  new  legislation, 
even  while  it  is  administering  that  which  has  been  enacted.  Thus 
the  bitter  feeling  against  it  is  bound  to  be  permanently  at  high  pitch, 
and  those  who  differ  from  it  would  likely  have  no  confidence  in  its 
being  able  to  administer  the  law  disinterestedly.  Then,  too,  as  we 
shall  show,  if  a  law  is  administered  through  a  political  department, 


186  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

its  efficient  administration  may  be  subordinated  to  political  ex- 
pediency. 

It  is  in  order  to  avoid  these  difficulties  that  we  recommend  the 
method  already  adopted  in  several  States.  We  believe  that  an 
Industrial  Commission,  removed  from  the  heat  of  political  con- 
troversy, created  with  the  safeguards  proposed  herein,  would  have 
the  confidence  of  employers  and  employees.  Although  employers 
and  employees  may  have  hopelessly  divergent  opinions  on  policy,  yet 
when  the  policy  is  once  determined  upon  by  Congress  they  are  equally 
concerned  in  its  efficient  and  disinterested  administration.  If  assured 
of  this,  they  cooperate  in  its  successful  enforcement. 

Furthermore,  much  opposition  to  labor  legislation,  both  by  capital 
and  labor,  is  based  upon  the  fear  that  its  administration  will  be 
partial.  And  even  when  such  legislation  is  enacted,  unless  both  sides 
have  confidence  in  the  disinterestedness  of  the  administrators,  it  is 
doomed  to  remain  a  dead  letter  on  the  statute  books. 

In  recommending  that  tl^e  policy-determining  function  be  sepa- 
rated from  the  administrative  function,  we  wish  to  separate,  as  much 
as  possible,  the  problems  upon  which  capital  and  labor  disagree  from 
those  in  which  they  have  a  common  interest.  Legislation  is  a  matter 
of  opinion.  Men  may  honestly  differ  as  to  the  wisdom  of  a  certain 
law.  Difference  of  opinion  when  strongly  contested  invariably  en- 
genders suspicion  and  distrust.  Hence,  if  an  Industrial  Commission 
were  called  upon  to  initiate  and  advocate  new  legislation  it  would 
be  forced  to  antagonize  and  lose  the  good  will  of  either  capital  or 
labor,  or  of  both.  Such  an  outcome  must  inevitably  hamper  its  ad- 
ministrative duties,  which  it  can  not  carry  out  successfully  unless  it 
has  the  confidence  of  both  sides. 

But  it  is  highly  essential  that  the  conditions  of  labor  be  constantly 
improved  and  adjusted  to  new  industrial  developments.  This  func- 
tion of  studying  and  promulgating  the  best  policies  for  promoting 
the  welfare  of  labor  should  be  left  to  the  Department  of  Labor,  as 
originally  intended  when  created.  The  future  interest  of  our  country 
demands  that  a  department  devote  itself  exclusively  to  the  further- 
ance of  the  welfare  of  labor.  New  problems  must  constantly  be 
studied,  information  furnished,  and  remedies  suggested.  Consider- 
ing that  in  the  final  analysis  public  opinion,  as  expressed  through 
legislation,  determines  the  nature  of  the  remedy,  it  is  proper  that  a 
political  department  be  intrusted  with  the  duty  of  aiding  in  deter- 
mining that  policy.  It  is  with  this  idea  in  mind  that  we  make  the 
distinction  between  the  enactment  of  law  which  is  political  in  its 
nature  and  must  be  fought  out  in  the  Congress  and  in  the  Cabinet 
and  the  administration  law  which  is  nonpolitical  and  should  be  ad- 
ministered by  disinterested  parties  in  cooperation  with  representa- 
tives of  capital  and  labor. 

The  conclusion  is  that  all  subjects  upon  which  Congress  has  not 
legislated  so  as  to  require  an  administrative  department  should  be  in 
the  hands  of  the  Department  of  Labor.  Among  these  are  the  impor- 
tant subjects  of  sickness  insurance,  invalidity  insurance,  unemploy- 
ment insurance,  old-age  pensions,  occupational  disease,  child  and 
woman  labor,  and  so  on.  The  department  should  make  studies  of 
comparative  administration  of  labor  law  and  the  administration  of 
laws  in  the  States.  Other  subjects  might  be  mentioned.  In  fact 
there  should  be  no  limitation  on  its  field  of  investigation  and  the 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  187 

education  of  the  public  to  the-  evils  which  labor  suffers  and  the  reme- 
dies that  should  be  adopted. 

The  Industrial  Commission  is  purely  an  administrative  body  not 
intended  to  promote  new  legislation,  except  where  it  is  needed  in 
connection  with  its  administration  of  existing  laws.  Other  new 
legislation  gets  its  initiative  elsewhere.  The  proper  place  for  oppos- 
ing interests  to  make  their  fight  on  new  laws  is  in  the  State  legisla- 
tures and  in  Congress.  Each  side  necessarily  endeavors  to  elect  its 
representatives,  to  employ  its  lobby,  and  to  use  every  honorable 
method  in  its  power  to  defeat  the  other  side.  The  outcome  is  usually 
a  compromise  not  wholly  satisfactory  to  either.  But  it  does  not 
follow  that  the  fight  should  be  kept  up  in.  the  administration  of  the 
laws  that  are  enacted.  Whatever  they  are,  they  should  be  enforced 
exactly  as  they  stand,  and  neither  side  should  control  the  executive 
and  administrative  officers.  These  should  be  impartial.  It  is  because 
executive  officials  are  mainly  partisans  that  the  administration  of 
labor  laws  in  this  country  has  broken  down.  They  may  be  appointed 
by  political  parties,  but  back  of  the  politicians  are  the  employers  or 
the  trade-unions  that  make  secret  or  open  deals  with  the  politicians 
in  order  to  control  the  offices.  It  can  not  be  expected  that  employers 
will  readily  accept  investigation  or  obey  the  orders  of  officials  whom 
they  know  or  suspect  to  be  agents  of  unions  or  of  politicians,  intent 
on  strengthening  unionism  or  making  political  capital  out  of  their 
positions.  It  is  natural  that  employers  should  protect  themselves 
either  by  getting  their  own  agents  into  the  positions  or  by  getting  a 
weak  and  inefficient  trade-unionist  appointed.  In  any  case  the  laws 
are  not  enforced,  and  the  laboring  classes  in  turn  become  desperate 
and  defiant  of  Government.  An  illustration  is  found  in  the  recent 
industrial  troubles  in  Colorado.  Probably  no  State  of  its  size  in 
the  Union  has  had  upon  its  statute  books  more  labor  laws  than  Colo- 
rado, nor  more  trade-union  representatives  in  office  to  enforce  them, 
yet  the  nonenforcement  of  the  labor  laws  was  undoubtedly  one  of  the 
contributing  causes  of  the  recent  troubles.  The  history  of  many 
other  States  is  similar,  so  far  as  nonenforcement  is  concerned.  Labor 
representatives  alternate  with  employer  representatives  or  with 
labor  politicians,  who  make  a  show  of  enforcing  the  laws  while  the 
masses  of  labor  get  no  substantial  benefit. 

American  experience  has  shown  that  this  situation  can  be  met  only 
by  a  nonpartisan  commission,  removed  as  far  as  possible  from  poli- 
tics. In  other  countries,  and  in  British  colonies  having  parliamen- 
tary forms  of  government,  this  kind  of  separate  commission  is  not 
required,  for  the  good  reason  that  the  Cabinet  officer  who  enforces  the 
labor  laws  is  a  member  of  Parliament,  and  Parliament  must  be  dis- 
solved and  a  new  election  ordered  if  the  Cabinet  loses  control.  Hav- 
ing a  seat  on  the  floor  of  the  legislature  he  must  answer  questions 
put  by  the  opposition.  If  one  of  his  subordinates  is  inefficient  or 
takes  sides  against  employers  or  unions,  some  one  in  Parliament  is 
liable  to  rise  and  demand  explanations,  and  the  Cabinet  minister  is 
compelled  to  explain  and  to  stand  by  the  subordinate  or  to  repudiate 
him.  The  opposition  may  even  be  able  to  defeat  the  ministry  and 
get  a  new  election.  Consequently,  Cabinet  officers  are  responsible  to 
Parliament,  and,  although  they  are  partisans  and  politicians,  they 
are  careful  that  their  subordinates,  who  actually  administer  the  laws, 
shall  be  impartial  and  efficient.  In  no  other  country,  governed  by  a 


188  REPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS. 

parliament,  would  such  important  boards  as  the  Interstate  Com- 
merce Commission,  the  Federal  Trade  Commission,  the  Federal 
Reserve  Board,  or  the  State  railroad  and  public  utility  commissions, 
be  taken  out  from  under  the  jurisdiction  of  a  responsible  cabinet 
minister.  In  this  country  it  is  found  necessary  to  make  them  wholly 
or  partly  independent,  because  there  is  no  officer  directly  responsible 
to  the  legislature  or  the  people  who  can  be  given  control  over  them. 

The  same  is  true  of  the  labor  departments  of  parliamentary  coun- 
tries compared  with  such  departments  in  the  American  State  and 
Federal  Governments.  The  issues  in  this  country  are  too  vital  and 
menacing,  they  are  too  easily  turned  into  political  capital,  and,  at 
the  same  time,  the  politicians  in  charge  are  too  little  responsible  to 
the  legislatures,  to  Congress,  and  to  the  voters,  for  the  American 
people  to  leave  them  in  the  hands  of  partisan  or  political  officials. 
The  plan  of  an  industrial  commission  with  a  representative  council 
as  herein  recommended,  is  based  on  American  experience  and  fitted 
to  American  conditions  in  dealing  with  such  issues  of  opposing 
interests. 

But  the  commissions  created  to  deal  with  the  relations  between 
other  opposing  interests  can  not  be  accepted  as  models  for  dealing 
with  the  opposing  interests  of  capital  and  labor.  The  Interstate 
Commerce  Commission  was  designed  to  reconcile  the  opposing  in- 
terests of  railroads  and  shippers,  the  Federal  Trade  Commission  of 
monopolies  and  competitors,  the  Federal  Reserve  Board  of  bankers 
and  borrowers,  but  in  none  of  these  ca-ses  were  the  opposing  interests 
strongly  organized  for  aggression  and  occasional  paralysis  of  busi- 
ness verging  on  civil  war.  It  was  not  so  necessary  then  that  the 
opposing  sides  should  be  strongly  represented,  as  is  recommended  in 
the  creation  of  the  Advisory  Representative  Council.  This  council  is 
a  kind  of  parliament  designed  to  hold  the  commission  continuously 
to  the  impartial  performance  of  its  duties  and  the  accuracy  of  inves- 
tigations upon  which  the  impartial  performance  of  duties  depends. 

The  Industrial  Commission,  as  here  proposed,  adopts  methods  in 
the  field  of  labor  laws  similar  to  those  that  collective  bargaining 
between  unions  and  emphwers  adopts  in  drawing  up  voluntary  joint 
agreements.  Modern  trade  agreements  are,  in  fact,  almost  complete 
codes  of  labor  law  for  a  particular  industry,  and,  if  voluntary  col- 
lective bargaining  could  become  universal  and  effective  for  all  em- 
ployers and  employees,  then  the  State  or  Government  might  not  need 
to  enact  many  labor  laws.  Something  like  this  is  actually  attempted 
in  those  countries  having  compulsory  arbitration.  They  provide 
easy  methods  for  organizing  and  perpetuating  unions  of  employers 
and  unions  of  employees.  They  try  to  induce  the  representatives 
of  these  unions  voluntarily  to  recognize  each  other,  to  get  together 
to  investigate  grievances  and  demands,  to  confer  and  to  draw  up  and 
enforce  a  joint  agreement  covering  all  alleged  evils  and  grievances. 
If  they  can  not  succeed  in  doing  this  they  provide  a  court  of  arbitra- 
tion with  substantially  all  the  powers  that  the  conferees  of  the  unions 
and  employers  would  have,  if  they  acted  without  compulsion. 

But  compulsory  arbitration  is  too  remote  to  be  considered,  or  even 
anything  which  would  logically  lead  to  compulsory  arbitration.  In 
paragraph  14  we  recommend  voluntary  collective  bargaining  with 
the  Government  acting  only  as  mediator  without  any  compulsory 
powers.  Our  alternative  proposed  for  compulsory  arbitration  is  in 


fa 


REPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS.  189 

part  an  industrial  commission  with  a  council  of  employers  and 
employees. 

The  need  of  an  industrial  commission  becomes  more  pressing  in 
proportion  as  new  laws  are  enacted  and  new  executive  duties  are 
added.  It  was  the  introduction  of  workmen's  compensation  that 
forced  attention  to  the  situation.  Here  is  a  new  type  of  legislation 
which  is  so  evidently  a  matter  in  which  employers  are  as  much  con- 
cerned as  employees  that  it  was  not  considered  proper  to  intrust  its 
administration  to  a  department  controlled  solely  in  the  interests  of 
labor.  Consequently  separate  commissions  were  created  independent 
of  the  labor  bureau,  or  else  the  compensation  law  was  put  in  charge 
f  the  courts. 

-But  the  most  important  effect  of  the  compensation  laws  is  not  the 
compensation  to  workmen,  for  no  law  pretends  to  pay  the  workman 
anything  for  his  suffering  nor  even  to  pay  him  his  total  loss  in  wages. 
The  most  important  effect  is  the  universal  pressure  on  employers  to 
prevent  accidents  and  to  heal  the  injury  as  soon  as  possible. 

Wherever  this  object  of  the  law  was  understood  either  the  work 
of  factory  inspection  for  accident  prevention  was  taken  from  the 
labor  bureau  or  the  compensation  commission  and  the  labor  bureau 
were  consolidated.  One  reason  for  doing  this  is  that  employers  have 
become  as  much  interested  in  accident  prevention  as  have  workmen, 
for  it  becomes  a  matter  of  business  and  profits.  Another  reason  is 
that  the  compensation  commission  itself  may  not  be  tempted  to  exalt 
the  less  important  object  of  compensation  over  the  more  important 
one  of  accident  prevention  and  speedy  cure. 

The  employers  now  become  just  as  much  concerned  as  the  employ- 
ees in  having  an  efficient  factory  inspection.  They  must  do  their 
own  inspection,  anyhow,  for  the  sake  of  reducing  tlie  costs  of  com- 
pensation, and  they  do  not  need  to  be  prosecuted  as  they  did  before. 
What  they  need  in  factory  inspection  is  the  help  of  inspectors  who 
are  expert  in  showing  them  how  to  prevent  accidents  and  how  to 
organize  safety  committees  and  to  get  the  "safety  habit"  into  their 
employees.  Whatever  reason  may  formerly  have  existed  for  trade- 
unions  to  get  their  members  appointed  as  factory  inspectors  in  order 
to  drive  home  prosecutions  no  longer  exists.  Neither  do  employ- 
ers any  longer  have  reason  for  using  political  or  underhanded 
methods  in  order  to  get  weak  and  inefficient  inspectors  appointed. 
Employers  now  wish  to  cooperate  with  factory  inspectors,  and  the 
only  kind  they  can  cooperate  with  are  those  who  are  impartial  and 
efficient.  The  fact  that  employers  have  taken  the  lead  in  their  three 
great  safety  organizations  mentioned  under  paragraph  1,  instead  of 
being  led  by  State  and  Federal  labor  officials,  shows  unmistakably 
the  need  of  enlisting  employers  in  at  least  this  branch  of  labor  law. 

Another  subject,  unemployment,  the  most  serious  and  distressing 
of  all,  is  almost  universally  agreed  as  needing  a  comprehensive  plan 
of  employment  offices.  It  is  now  generally  admitted  that  it  must  be 
dealt  with  by  the  Federal  Government.  Both  England  and  Germany 
have  national  systems  of  public  employment  offices.  The  English 
system  is  operated  directly  by  the  National  Government;  the  German 
system  is  operated  by  the  city  and  State  governments  correlated 
and  supervised  by  the  Federal  Government.  A  combination  of  both 
methods  will,  perhaps,  be  necessary  in  this  country.  Bills  have  al- 


190  EEPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

ready  been  introduced  in  Congress,  and  the  Department  of  Labor 
has  begun  the  establishment  of  offices.  But,  in  the  contest  between 
employers  and  trade-unions,  the  control  of  employment  offices  is 
essential  to  either  side.  The  antiunion  employers'  associations  already 
have  sufficient  employment  offices,  and  many  local  trade-unions  have 
employment  agencies  of  their  own. 

Employers  control  the  jobs.  They  hire  whom  they  please.  Surely 
they  can"  not  be  expected  to  hire  workmen  sent  to  them  by  trade- 
unionists  or  politicians  who  happen  to  run  the  public  employment 
offices.  This  accounts  for  the  inefficiency  of  the  offices  in  almost 
every  place  where  they  have  been  tried.  They  sink  to  the  level  of 
charity,  finding  occasional  short  jobs  for  casuals,  but  do  not  become 
the  great  labor  exchanges  which  they  should  be  as  the  first  step  in 
dealing  with  the  most  serious  of  all  problems,  unemployment.  Ex- 
perience shows  that  employers  must  have  confidence  in  the  ability 
and  impartiality  of  the  officials  who  run  the  employment  offices  or 
they  will  not  patronize  them.  On  the  other  hand,  trade-unionists 
must  have  confidence  that  the  offices  will  not  be  used  to  furnish 
strike  breakers.  The  only  effective  solution  of  this  predicament  is 
the  management  of  these  offices  by  joint  committees  of  organized  em- 
ployers and  organized  employees  and  their  joint  civil-service  exami- 
nation of  the  officials  who  run  the  offices.  Under  the  Industrial  Com- 
mission plan  there  are  not  only  representative  councils  at  the  na- 
tional headquarters,  but  similar  councils  for  each  State  and  for  each 
local  office. 

Furthermore,  no  Federal  legislation  is  more  urgent  than  the  su- 
pervision of  private  commercial  offices  doing  an  interstate  business. 
If  this  country  expects  to  promote  public  offices  and  to  regulate  pri- 
vate offices,  the  only  effective  way  is  through  joint  control  by  the 
acknowledged  representatives  of  organized  employers  and  employees, 
cooperating  with  a  Federal  commission  that  is  impartial  and  non- 
political. 

The  subject  of  industrial  education  is  vital  to  the  Nation  as  a 
whole  and  immediately  critical  for  both  employers  and  employees. 
Yet,  when  a  bill  is  introduced  in  Congress  for  national  aid  to  in- 
dustrial education,  the  administration  is  not  placed  under  the  De- 
partment of  Labor,  where  it  would  naturally  belong  and  where  more 
has  been  done  than  in  all  other  departments  in  the  investigation  of 
the  subject.  It  is  proposed  to  place  the  administration  under  an  ex 
officio  board  of  cabinet  officers  with  an  officer  of  the  Bureau  of  Edu- 
cation acting  as  executive.  Furthermore,  no  standards  of  efficiency 
are  imposed  upon  the  States  as  a  condition  of  receiving  the  funds 
appropriated  out  of  the  Federal  Treasury.  (Par.  17.)  This  bill  com- 
bines the  features  of  political  control,  "  pork-barrel "  finance,  and  ex- 
clusion of  the  two  great  interests  of  employers  and  employees  who 
are  most  directly  concerned.  The  reasons  for  such  recommendations 
are  the  popular  demand  for  industrial  education,  and  the  lack  of 
any  effective  method  of  bringing  together  the  representatives  of  em- 
ployers (including  farmers)  and  employees.  Such  representatives 
are  the  ones  who  know  the  needs  of  industry  and  agriculture  and  are 
competent,  with  the  aid  of  qualified  educators,  provided  neither  side 
dominates  the  other,  to  set  up  the  standards  of  efficient  industrial 
training  which  should  be  made  the  essential  condition  of  receiving 
Federal  aid.  For  this  purpose  the  Industrial  Commission  should 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  191 


add  to  its  advisory  council  representatives  of  organizations  of  edu- 
cators, such  as  the  National  Education  Association,  and  the  Na- 
tional Society  for  Promotion  of  Industrial  Education.  The  Federal 
Industrial  Commission,  upon  the  advice  of  such  a  council,  includ- 
ing employers,  employees,  farmers,  and  educators,  could  then  de- 
termine the  standards  as  a  basis  for  receiving  subsidies,  which 
should  probably  require  the  States  to  provide  governing  boards  of 
employers,  employees,  farmers,  and  educators,  continuation  day 
schools  with  compulsory  attendance  on  the  employer's  time,  adequate 
training  of  teachers  with  practical  industrial  experience,  and  so  on. 

In  making  the  preceding  three  recommendations  no  reflection  is 
intended  on  any  particular  State  or  Federal  official  now  charged 
with  the  administration  of  labor  laws.  It  is  conceded,  that  many  of 
them  may  be  doing  the  best  work  possible  under  existing  laws.  But 
it  is  recognized  that  the  conditions  under  which  they  work  make  it 
impossible  either  to  administer  existing  laws  effectively  or  to  assume 
the  administration  of  additional  laws  urgently  required  to  meet  the 
increasingly  difficult  and  complex  problems  of  capital  and  labor. 

Instead  of  interfering  with  the  commendable  work  of  trade-unions 
the  recommendations  are  intended  to  strengthen  unionism  at  its 
weakest  point.  One  of  the  most  serious  obstacles  in  the  way  of  a 
harmonious  labor  movement  is  the  struggle  of  ambitious  unionists 
to  get  the  indorsement  and  control  of  their  unions  for  political  posi- 
tions. The  conflicts  within  unions  for  such  indorsement  and  support 
are  notorious  in  weakening  the  unions.  Furthermore,  in  order  to  get 
and  hold  a  political  position  the  unionist  must  make  alliance  or 
connivance  with  and  concessions  to  the  leaders  of  political  parties, 
and  therefore  is  not  free  to  support  consistently  the  demands  of 
labor.  He  must  also  often  support  or  even  appoint  other  politicians 
whose  influence  is  used  against  the  unions.  This  unquestionably 
weakens  or  destroys  the  confidence  of  laborers  generally  in  the  in- 
tegrity and  faithfulness  of  all  their  leaders  who  accept  political  posi- 
tions, or  are  suspected  of  trying  to  get  such  positions.  It  is  only 
when  the  union  representative  is  paid  from  his  union  treasury  in- 
stead of  the  public  treasury,  and  is  recalled  by  his  union,  that  he  is 
truly  representative  and  the  union  itself  has  a  sound  basis  for  per- 
manency and  growth. 

Our  recommendations  adopt  this  principle  and  counteract  this 
weakness  of  unionism  by  making  their  representatives  on  the  ad- 
visory council  dependent  solely  on  the  unions.  They  receive  no 
salaries  from  the  public  treasury,  and  can  be  recalled  at  any  time 
when  they  cease  to  be  representative.  The  result  is  that  the  unions 
usually  nominate  for  such  positions  their  regular  officers  or  business 
agents  who  receive  salaries  from  the  union  treasury  for  other  pur- 
poses. Under  such  circumstances  there  can  ordinarily  be  no  question 
of  the  union  representatives  "  selling  out "  to  employers  or  politicians. 

INVESTIGATIONS. 

4.  The  Industrial  Commissions  to  make  and  publish  investigations 
and  recommendations  on  all  subjects  whose  administration  is  in- 
trusted to  them.  Investigations  and  recommendations  on  other  sub- 
jects to  be  made  only  on  the  request  of  the  legislature,  Congress,  or 
the  court.  (Pars.  12,  13.)  Since  it  is  provided  (par.  14)  that  the 


192  REPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS. 

Federal  and  State  commissions  shall  cooperate  in  the  mediation  of 
labor  disputes,  the  Federal  commission  should  be  the  agency  to 
which  the  States  should  look  for  continuous  investigations  and  pub- 
lications for  the  entire  country  of  wages,  hours  of  labor,  cost  of 
living,  joint  trade  agreements,  and  all  subjects  involved  in  labor  dis- 
putes, but  the  names  of  establishments  or  individuals  should  be  kept 
confidential.  It  should  publish,  at  least  annually,  a  report  on  all 
strikes,  lockouts,  boycotts,  blacklists,  that  have  terminated  during  the 
year,  but  should  not  make  such  investigations  during  an  industrial 
dispute  unless  consented  to  by  both  parties  in  the  manner  elsewhere 
provided.  (Par.  14.)  In  making  such  reports  it  should  give  all 
material  facts,  including  demands,  negotiations,  picketing,  strike- 
breakers, conciliation,  the  acts  of  State  or  Federal  authorities,  as 
well  as  joint  agreements  reached  with  or  without  cessation  of  busi- 
ness. In  preparing  these  reports  the  commission  should  not  call  upon 
any  mediator,  but  should,  if  necessary,  use  its  powers  of  compulsory 
testimony. 

In  order  to  assist  State  minimum-wage  commissions  in  the  most 
difficult  part  of  their  work  the  Federal  commission  should  also  in- 
vestigate and  report  upon  interstate  competition  and  the  effect  of 
minimum-wage  laws.  Such  investigations  are  of  assistance  also  in 
determining  other  questions.  State  commissions  should  make  reports 
on  safety,  compensation  for  accidents,  minimum- wage  investigations, 
employment  offices,  child  labor,  etc. 

No  publication  of  any  investigations  to  be  made  or  any  rules  (par. 
5)  to  be  issued  without  previously  submitting  them  to  all  members  of 
the  representative  advisory  council,  with  opportunity  for  criticism, 
the  latter  to  be  published  by  the  commission  with  its  own  report. 
All  forms,  schedules,  and  instructions  for  investigators  likewise  to 
be  submitted  to  the  advisory  council. 

These  recommendations  regarding  investigations  are  the  most  im- 
portant of  all  the  recommendations  regarding  the  Industrial  Com- 
mission. All  of  the  other  recommendations  culminate  in  the  validity 
of  its  investigations.  Investigations  furnish  the  basis  for  drafting 
laws  by  the  legislature,  for  formulating  rules  and  regulations  by  the 
commission  (par.  5),  for  interpretation  of  laws  and  rules  by  the 
courts,  and  for  prosecutions  in  enforcing  the  laws.  The  recommenda- 
tions for  an  industrial  commission,  for  an  advisory  council,  for  civil- 
service  appointments,  for  subsidies  (par.  IT),  and  for  court  proce- 
dure (par.  7)  are  all  directed  toward  securing  reliability  and  confi- 
dence^  in  the  investigations  and  conclusions  of  the  commission. 

It  is  required  that  all  investigations  and  proposed  publications 
shall  be  submitted  to  the  representative  council  before  they  are  issued 
and  time  enough  given  for  consideration  and  criticism.  If,  then,  any 
rules  are  issued  (par.  5)  or  investigations  published  without  the 
approval  of  either  side,  their  validity  and  accuracy  are  at  once  con- 
demned and  the  commission  is  discredited.  Under  a  partisan  or 
political  department  of  labor,  it  is  unlikely  that  statistics  and  inves- 
tigations are  accepted,  either  by  the  public  or  by  both  employers  and 
employees,  at  their  face  value.  Nothing  more  serious  can  exist,  in  a 
country  which  depends  so  much  on  public  opinion,  than  this  distrust 
of  official  publications  and  statistics  which  purport  to  give  all  the 
facts  upon  which  public  opinion  forms  its  conclusions.  Employers, 


REPORT  OF   COMMISSION   OX   INDUSTRIAL   RELATIONS.  193 


.mployees,  and  the  general  public  should  be  able  to  rely  implicitly 
for  their  conclusions  on  official  statistics  on  wages,  hours  of  labor, 
health,  safety,  cost  of  living,  unemployment,  costs  of  production,  dis- 
tribution of  wealth,  strikes,  boycotts,  and  all  other  material  facts 
bearing  on  the  relations  of  capital  and  labor.  All  labor  legislation, 
all  administration  of  labor  lawrs,  all  efforts  at  mediation  and  arbitra- 
tion, all  recommendations  of  public  bodies,  go  back  for  their  justi- 
fication to  statistics  and  investigations.  The  money  of  the  Govern- 
ment is  worse  than  wasted,  and  the  officials  are  discredited  if  there 
remains  any  interested  body  of  citizens  who  do  not  place  confidence 
in  these  official  statistics  and  investigations.  The  temptation  is  so 
great,  in  view  of  the  struggle  between  capital  and  labor,  to  distort 
or  suppress  or  obliterate  facts  that  no  precautions  top  great  can  be 
taken  to  secure  thorough  criticism,  verification,  and  filling  in  of  omis- 
sions before  the  facts  are  published.  No  matter  whatever  else  may 
be  recommended,  no  recommendation  can  be  depended  upon  that 
does  not  provide  fully  for  the  integrity,  reliability,  and  complete 
inclusion  of  all  material  facts  in  every  publication  of  official  statis- 
tics and  investigations.  There  is  no  certain  method  of  doing  this 
except  in  the  recommendation  that  all  alleged  facts  of  statistics  and 
investigations  be  submitted  to  the  parties  directly  interested  and 
affected  by  the  conclusions.  The  proposed  advisory  council,  composed 
of  acknowledged  representatives  of  these  parties,  acting  independ- 
ently, without  intimidation  or  connivance,  and  watchful  against 
any  advantage  attempted  by  the  opposing  yet  cooperating  interest, 
consulting  their  constituents  on  any  matter,  can  be  trusted  to  see  to 
it  that  no  material  facts  or  conclusions  are  published  without  con- 
clusive proof  and  none  suppressed  without  disproof.  If  any  member 
of  the  council  objects  to  any  final  statement  or  conclusion,  he  is  enti- 
tled within  limits  to  have  his  protest  published  along  with  the  report 
of  the  commission.  In  fact,  the  entire  spirit  of  these  recommenda- 
tions is  the  utilization  by  Government  of  the  organizations  that  have 
both  common  and  hostile  interests,  in  order  to  protect  the  Govern- 
ment itself  against  partisanship  and  partiality  in  dealing  with  the 
serious  conflict  between  those  interests.  It  is  because  the  reports, 
findings,  and  recommendations  of  the  present  commission  were  not 
submitted  to  parties  affected  thereby  or  to  an  advisory  committee 
similar  to  the  one  proposed  for  a  permanent  commission  that  we  can 
not  accept  them  as  verified  or  criticized,  so  that  we  could  have  before 
us  when  finally  acting  upon  them  any  criticisms  or  assurance  that 
their  statements  were  accurate  or  that  important  omissions  had  not 
been  made.  An  advisory  committee  to  this  commission,  similar  to 
the  one  proposed,  was  approved  for  a  short  time  and,  after  making 
changes  in  the  proposals  of  the  staff  having  the  measures  in  charge, 
made  certain  unanimous  recommendations  as  bills  to  this  commis- 
sion, but  the  committee  was  discontinued  before  it  could  complete  its 
work.  No  staff  of  investigators,  however  careful,  can  be  expected 
to  have  such  complete  knowledge  of  their  subject  as  to  be  trusted 
without  the  scrutiny  and  criticism  of  the  interests  or  persons  affected 
by  their  reports.  Whenever  a  permanent  industrial  commission  is 
created  there  can  be  no  provision  more  essential  than  that  of  provid- 
ing the  representative  machinery  for  reliable  investigations,  find- 
ings, and  publicity. 

38819°— 16 13 


194  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

An  illustration  of  the  method  of  supervision  of  investigation  here 
advocated  is  afforded  by  the  Interstate  Commerce  Commission.  The 
statistics  of  wages  and  hours  collected  by  that  commission  are  of 
importance  in  matters  of  mediation.  They  were  so  collected  and 
arranged  that  they  could  not  be  relied  upon  for  that  purpose.  Con- 
sequently a  conference  was  called,  consisting  of  the  railway  account- 
ants, the  railroad  brotherhoods  and  other  labor  organizations,  the 
statisticians  of  the  commission  and  of  the  Department  of  Labor,  to 
consider  the  statistics.  After  the  discussion,  which  failed  in  some 
respects  to  reach  agreement,  the  Interstate  Commerce  Commission 
issued  new  rules  changing  several  features  of  the  statistics  in  order 
to  avoid  the  criticisms  advanced,  the  changes  to  go  into  effect  in  1915. 
It  is  this  method  of  statistical  investigation  that  is  recommended  to 
be  made  mandatory  on  Industrial  Commissions. 

The  Industrial  Commissions  herein  recommended  are  modeled  in 
part  upon  the  example  of  the  railroad  and  public  utilities  commis- 
sions, the  Interstate  Commerce  Commission,  the  Federal  Trade  Com- 
mission, and  the  Federal  Reserve  Board.  Their  powers  are  partly 
legislative,  partly  judicial,  and  partly  executive.  That  which  is  most 
important  is  their,  power  of  making  investigations  of  facts  and  condi- 
tions and  then  issuing  orders  (par.  5)  based  on  such  investigations. 
The  legislature  or  Congress  lays  down  a  general  policy  or  standard, 
but  does  not  go  into  all  of  the  minor  details  and  variations  that  are 
needed  to  fit  the  policy  to  actual  conditions.  In  the  case  of  rail- 
roads it  gives  up  the  attempt  to  enact  a  schedule  of  freight  and 
passenger  rates  and  merely  requires  of  railroad  corporations  that 
all  rates  and  services  shall  be  reasonable,  that  there  shall  be  no 
discriminations,  and  so  on.  The  commission  then  investigates 
each  case  as  it  comes  up  and  issues  a  detailed  order  intended 
to  carry  out  the  policy  and  enforce  the  standard  laid  down  by 
the  legislature  or  Congress.  In  the  case  of  labor  law  the  legisla- 
tive standards  differ  according  to  the  object  of  the  law.  In  matters 
of  safety  the  legislature  requires  employers  to  keep  their  work  places 
safe,  and  leaves  to  the  commission  the  investigation  of  conditions 
and  of  safety  devices  necessary  to  be  installed  in  each  industry  or 
shop,  with  power  to  order  them  installed.  In  compensation  for  ac- 
cidents the  legislature  requires  the  employer  to  pay  50  per  cent  or 
more  of  the  wages  lost  for  a  certain  time,  and  then  gives  the  com- 
mission power  to  investigate  each  case  if  necessary,  and  to  determine 
exactly  the  amount  arid  all  details,  and  to  order  the  employer  to 
pay  that  amount.  Other  standards  may  be  set  up  by  the  legislature, 
if  it  wishes  to  do  so,  for  hours  of  labor,  minimum  wages,  exclusion 
of  women  and  children  from  dangerous  employment,  regulation  of 
private  employment  offices,  and  so  on,  covering  the  entire  field  of 
labor  legislation. 

It  is  evident  that  the  legislature  can  not  itself  make  all  of  these 
investigations.  It  must  depend  upon  others.  In  practice,  too,  the 
legislature  and  Congress  are  not  willing  to  delegate  to  a  single  execu- 
tive official  the  power  of  issuing  rules  and  orders.  This  power  is 
quasi  judicial.  Consequently  the  legislature  and  Congress  create 
commissions  with  three  or  more  members,  in  order  to  require  delib- 
eration and  a  fair  representation  and  hearing  for  all  interests  that 
are  benefited  by  or  compelled  to  obey  the  rules.  A  single  executive 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  195 

official  is  liable  to  be  one-sided  and  partisan,  or  to  act  without  delib- 
eration, or  to  be  frequently  changed,  but  a  commission  can  be  organ- 
ized so  as  to  be  impartial,  deliberative,  and  continuous. 

In  the  administration  of  all  other  labor  laws,  such  as  those  on  in- 
dustrial education,  child  labor,  hours  of  labor,  minimum  wage,  and 
so  on,  there  are  points  of  antagonism  and  points  of  harmony  between 
capital  and  labor.  The  points  of  antagonism  are  enlarged  and  ex- 
aggerated when  one  side  or  the  other,  through  practical  politicians, 
controls  the  offices.  The  points  of  harmony  can  only  be  discovered 
by  investigation,  and  the  investigations  must  be  cooperative  between 
employers  and  unions,  else  neither  side  will  have  confidence  in  the 
results.  The  Industrial  Commission  and  its  subordinate  officials,  of 
course,  have  to  be  depended  on  to  make  the  actual  investigations, 
but  the  provision  in  the  foregoing  recommendation,  that  all  matters 
and  all  proposed  publications  shall  be  submitted  to  the  advisory 
council,  representing  the  opposing  interests,  for  their  advice  and 
criticism  but  not  their  veto,  goes  as  far  as  practicable  toward  secur- 
ing that  the  investigations,  conclusions,  and  rules  of  the  commission 
and  its  subordinates  will  have  the  confidence  of  both  sides. 

The  particular  recommendation  regarding  investigations  of  labor 
disputes  is  associated  with  a  later  recommendation  regarding  media- 
tion. (Par.  14.)  While  recommending  voluntary  mediation,  it  is 
recognized  that  strikes  and  lockouts  are  of  such  public  importance 
that  the  public  is  entitled  to  accurate  information  regarding  their 
causes  and  continuance.  In  connection  with  its  other  investigations 
the  investigation  of  strikes  and  lockouts  shows  underlying  causes  of 
industrial  unrest  and  the  failure  of  legislation  or  administration  to 
remedy  them.  Official  investigations  and  reports  on  those  subjects 
have  not  as  a  rule  been  accepted,  because  they  have  been  colorless 
for  fear  of  giving  offense,  or  because  they  are  conducted  under  the 
direction  of  partisans  of  one  side  or  the  other.  It  is  expected  that 
investigations  conducted  under  the  supervision  of  the  advisory 
council  will  avoid  the  defects  of  many  official  investigations. 

All  investigations  of  a  general  character,  such  as  those  on  safety 
devices,  wrages,  hours,  conditions  of  labor,  and  interstate  competition, 
should  be  made  by  the  Federal  commission,  relieving  the  State  com- 
missions or  bureaus  for  their  work  of  local  investigations,  administra- 
tion, and  inspection,  the  Federal  commission  to  be  the  central 
standardizing  agency,  leaving  the  State  free  to  adopt  or  reject  the 
standards.  (Par.  if.)  The  investigation  of  interstate  competition 
and  the  effect  of  minimum  wage  laws  will  be  of  use  in  the  most 
difficult  part  of  the  work  of  State  minimum  wage  commissions,  which 
we  indorse  in  so  far  as  women  and  children  are  concerned. 

RULES  AND  REGULATIONS. 

5.  The  commission  to  make  rules  and  regulations  for  carrying  into 
effect  the  provisions  of  the  labor  laws  which  it  enforces.  This  may 
be  done  by  providing,  in  the  industrial  commission  law  or  otherAvise, 
for  certain  brief  standards  as  may  be  determined  by  the  legislature, 
for  example,  that  all  places  of  employment  shall  be  safe  and  sanitary, 
as  the  nature  of  the  industry  will  reasonably  permit,  that  no  person 
shall  be  allowed  to  work  for  such  hours  of  labor  or  at  such  times  as 


196  REPOBT  OF   COMMISSION   OX   INDUSTRIAL   RELATIONS. 

are  dangerous  to  his  or  her  life,  health,  safety,  or  welfare,  that  em- 
ployment offices  shall  give  correct  information,  shall  not  split  fees, 
and  so  on.  Or,  less  preferably,  the  existing  labor  laws  may  be  re- 
tained or  new  ones  enacted  in  minute  detail,  and  the  Industrial  Com- 
mission may  be  given  power  merely  to  make  such  additional  rules 
and  regulations  or  variations  from  the  laws  as  are  necessary  to  give 
them  full  effect.  Rules  to  be  submitted  to  the  advisory  council  before 
issuing. 

The  method  of  brief  legislative  standards  above  mentioned  is 
adopted  by  most  of  the  States  having  Industrial  Commissions  and  it 
is  here  recommended,  but  the  latter  is  the  method  adopted  in  New 
York.  The  original  policy  of  American  labor  legislation  involved 
an  attempt  to  cover  in  detail  every  contingency  which  might  arise. 
This  method  has  proved  itself  impractical.  It  is  impossible  for  a 
legislature  charged  with  so  many  other  duties  and  having  but  little 
time  for  attention  to  any  of  them,  to  intelligently  provide  in  detail 
for  such  matters  as  the  safeguarding  of  machinery  or  the  regulation 
of  hours  of  labor  and  periods  of  rest  in  hundreds  of  different  em- 
ployments and. under  hundreds  of  different  circumstances.  Legisla- 
tion upon  these  subjects  has  to-day  reached  the  stage  long  ago 
reached  by  legislation  relating  to  public  health  and  public  utilities. 
The  legislature  can  provide  only  the  general  standards  and  must 
leave  to  administrative  officers  the  duty  of  "  filling  in  details." 

Whether  the  labor  laws  of  a  State  consist  onty  of  a  few  sections, 
as  in  Wisconsin,  or  are  a  bulky  law,  as  in  New  York,  there  still  exists 
the  necessity  for  the  further  filling  in  of  details,  and  if  the  labor  laws 
enacted  by  the  legislature  are  at  all  lengthy,  as  in  New  York,  there 
exists  the  additional  necessity  of  some  means  for  variations  in  deserv- 
ing cases,  either  by  express*  provision  of  the  law  or,  in  the  absence 
thereof,  by  the  tacit  overlooking  of  violations  by  the  officials  charged 
with  the  administration.  This  latter  practice  is  an  opportunity  for 
graft  or  favoritism.  A  factory  inspector  goes  into  an  establishment 
and  has  the  power  to  order  changes  amounting  to  several  thousand 
dollars.  He  finds  many  points  where  the  strict  letter  of  the  law  does 
not  apply.  Since  he  is  the  only  person  who  actually  interprets  the 
law  on  the  ground  he  can  readily  overlook  violations.  But  where  the 
laws  do  not  go  into  details,  but  an  Industrial  Commission  determines 
the  details  in  the  form  of  rules  fitted  to  conditions,  the  inspector  no 
longer  has  discretion  in  overlooking  violations.  He  must  report  all 
the  violations,  and  the  employer  has  another  remedy  besides  influ- 
encing the  inspector.  He  can  go  to  the  commission  with  a  petition 
that  a  different  rule  be  made  to  apply  to  his  case,  and  the  commission, 
after  a  public  hearing,  may  grant  or  reject  the  petition,  or  modify  its 
rule  for  that  particular  establishment.  Variations  must  be  made  in 
any  case.  The  difference  is,  that  where  there  is  no  commission  with 
power  to  make  rules,  the  variations  are  made  in  secret  by  the  different 
inspectors,  while  where  the  commission  has  this  power  they  are  made 
in  public.  (Par.  6.) 

In  the  recommendations  above,  the  briefest  kind  of  a  legislative 
standard  is  indicated.  Whatever  its  length,  however,  the  best  method 
of  filling  in  the  details  is  the  same.  It  is  not  unconstitutional  to  del- 
egate such  power  to  a  single  individual,  but  it  is  undesirable  and,  as 
already  pointed  out.  impracticable  to  confer  it  upon  one  person.  The 


REPORT  OF   COMMISSION   OX   INDUSTRIAL   RELATIONS.  197 

alternative  is  to  confer  it  upon  a  board  or  commission.  The  chief 
question  arising  here  is  whether  a  board  shall  be  created  especially 
for  this  purpose  or  whether  one  board  shall  perform  this  duty  to- 
gether with  that  of  administering  the  laws  and  the  rules  and  regula- 
tions made  by  it.  The  latter  is  the  Industrial  Commission  recom- 
mended. The  other  method  has  been  tried  in  the  two  greatest  indus- 
trial States  in  the  Union,  New  York  and  Pennsylvania,  but  the 
former  State  abandoned  it  after  a  two-j^ears'  trial.  In  New  York  it 
was  adopted  two  years  ago  when  the  factory  investigating  commis- 
sion declined  to  take  the  administration  of  the  labor  department  away 
from  a  single  executive,  but  adopted  a  compromise  through  establish- 
ing an  industrial  board  of  four  members,  together  with  the  labor 
commissioner  as  chairman,  to  perform  the  rule-making  function 
whether  in  the  form  of  general  rules  or  variations.  While  the  board 
has  done  much  good  work,  there  remains  little  doubt  that  the  same 
work  can  be  performed  even  more  intelligently  and.  effectively  by  a 
commission  which  is  also  actively  engaged  in  administrative  work. 
In  both  cases,  the  aid  of  committees  representing  particular  industries 
or  interests  has  been  and  must  be  largely  relied  upon.  On  the  other 
hand,  an  industrial  board  such  as  formerly  existed  in  New  York,  and 
still  exists  in  Pennsylvania,  the  rule-making  duties  of  which  are 
solely  legislative  in  their  nature,  without  power  of  enforcement,  is 
not  much  better  equipped  to  make  such  rules  and  regulations  than 
the  legislature,  except  that  its  number  is  smaller  and  its  personnel 
chosen  particularly  for  this  one  duty. 

The  recommendations  provide  different  methods  of  securing  uni- 
formity of  State  and  Federal  legislation  on  various  subjects  (pars. 
17,  18).  This  uniformity  has  been  secured  in  the  case  of  railroads 
by  exactly  the  same  method  as  the  one  here  proposed  to  be  made  man- 
datory. When  Congress  enacted  a  law  requiring  safety  couplings 
there  were  a  large  number  of  manufacturers  of  couplings  in  the  mar- 
ket. Congress  gave  authority  to  the  Interstate  Commerce  Commis- 
sion to  decide  on  the  kind  of  couplings  that  wTould  accomplish  the 
object  of  securing  safety.  The  commission  called  in  the  representa- 
tives of  the  railroads  and  of  the  railroad  brotherhoods,  with  the 
manufacturers  of  couplings,  and  after  several  conferences  the  present 
standards  were  adopted.  Other  standards  applying  to  railroad  cars 
were  also  adopted  in  this  way. 

At  the  present  time  there  is  urgent  need  for  Federal  aid  in  secur- 
ing uniformity  of  safety  devices.  This  can  be  done  to  a  certain 
extent  through  voluntary  cooperation  with  the  States.  Various  States 
with  industrial  commissions  are  going  ahead  with  their  own  stand- 
ards, and  there  is  apparently  no  means  of  securing  uniformity  until 
a  Federal  commission  is  given  power  to  act.  This  could  be  done  if 
the  Federal  commission  Drought  together  representatives  of  State 
factory  inspectors,  along  with  its  advisory  council  of  employers  and 
employees,  and  the  private  national  safety  organizations  mentioned 
under  paragraph  2.  B}7  agreeing  on  standards,  these  could  be 
adopted  by  every  State  commission  which  has  power  to  make  rules. 
And  the  Federal  commission  would  be  merely  a  central  standardiz- 
ing agency,  leaving  to  the  States  the  voluntary  adoption  of  the  stand- 
ards. If  it  were  desired  to  go  further,  a  Federal  law  granting  to  the 
Federal  Industrial  Commission  power  to  set  standards  for  interstate 


198  REPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS. 

shipment  of  machinery  not  equipped  with  the  standard  safety  devices 
might  be  adopted.  Each  method  would  require  a  Federal  commission 
to  set  standards. 

The  illustration  regarding  safety  is  taken  not  because  that  is  the 
most  important  problem,  but  as  furnishing  an  illustration  of  possible 
methods  applicable  in  other  lilies.  Similar  uniformity  might  be 
secured  in  the  regulation  of  private  employment  offices  and  other 
lines  of  labor  legislation,  as  the  States  or  Congress  may  determine. 
Of  course,  if  the  Congress  enacted  legislation  similar  to  the  Palmer- 
Owen  child-labor  bill,  the  extreme  step  would  be  taken  of  attempt- 
ing to  force  States  to  come  up  to  Federal  standards.  This  may  be 
necessary  in  some  cases,  but  the  Federal  Industrial  Commission 
affords  methods  of  securing  uniformity  in  some  branches  of  legisla- 
tion by  less  extreme  measures. 

The  courts  have  generally  denied  the  contention  that  this  delega- 
tion of  power  to  make  rules  and  issue  orders  is  unconstitutional  as  a 
delegation  of  legislative  or  judicial  power,  and  the  Supreme  Court 
of  the  United  States  has  used  the  term  "  administrative  "  to  describe 
those  powers  which  are  partly  legislative  or  judicial,  but  are  not  so 
exclusively  one  or  the  other  that  they  may  not  be  properly  conferred 
upon  an  executive  or  administrative  body.  ( See  Interstate  Commerce 
Commission  v.  Humboldt  S.  S.  Co.,  224  IT.  S.,  474;  Pennsylvania 
Kailway  Co.  v.  International  Coal  Mining  Co.,  230  U.  S.,  184;  Mitch- 
ell Coal  &  Coke  Co.  v.  Pennsylvania  Railway  Co.,  230  U.  S.,  274.) 

REVIEW  BY  COMMISSION. 

6.  Any  person  in  interest  to  be  entitled  to  petition  the  commission 
for  a  hearing  on  the  legality  or  reasonableness  of  any  rule  or  regu- 
lation or  of  any  order  directing  compliance  with  any  provisions  of 
law  or  other  rule  or  regulation  or  for  a  special  order  applicable  to 
a  single  establishment.  The  commission  may  change  its  rule  or  regu- 
lation before  final  decision  by  a  court  on  its  legality. 

This  recommendation  is  embodied  in  one  form  or  another  in  all  of 
the  State  commission  laws.  Under  the  prevailing  system  of  adminis- 
tering labor  laws  a  person  affected  by  an  order  enforcing  an  act  of 
the  legislature  has  no  opportunity  to  object  to  its  constitutionality, 
reasonableness,  or  validity  except  by  awaiting  prosecution  and  sub- 
mitting his  objection  as  a  matter  of  defense.  Not  only  is  this  cum- 
bersome and  undesirable  as  a  matter  of  procedure,  but  it  is  open  to  a 
very  serious  objection  that  it  brings  this  matter  up  often  for  final 
decision  by  a  petty  court,  or  even  before  a  local  magistrate  or  justice 
of  the  peace. 

Not  only  does  a  provision  of  the  sort  here  recommended  give  the 
person  affected  opportunity  to  make  proper  objections,  but  it  gives 
the  commission  an  opportunity  to  reconsider  its  rules  and  orders 
from  the  point  of  view  of  their  actual  application  in  concrete  cases 
before  they  are  subjected  to  tests  in  the  courts.  Questions  arising  in 
the  application  of  rules  and  orders  to  concrete  cases  frequently  de- 
pend upon  facts  and  conditions  which  are  difficult  to  bring  out 
accurately  and  thoroughly  in  the  courts.  The  proceedings  before  the 
commission  will  develop  the  facts  and  conditions  which  are  alleged 
to  justify  the  provision  and  those  which  the  employer  depends  upon 


REPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS.  199 

defeat  it  better  than  could  be  done  in  any  court.  It  is  frequently 
necessary  for  the  court  to  have  such  facts  available  in  order  to  ar- 
rive at  a  proper  decision  upon  the  constitutionality  of  such  a  rule 
or  order,  and  in  the  absence  of  such  a  proceeding  as  this,  an  appellate 
court  has  practically  no  means  of  obtaining  such  information.  This 
could  not  be  better  illustrated  than  in  the  recent  decision  of  the  New 
York  Court  of  Appeals  (People  v.  Schweinler  Press,  2M  N.  Y.,  395), 
upholding  the  constitutionality  of  the  section  of  the  labor  law  pro- 
hibiting night  work  for  women,  and,  in  effect,  overruling  its  own 
decision  of  eight  years  previous,  holding  a  similar  provision  un- 
constitutional. In  the  opinion  of  the  recent  case  the  court  frankly 
says  that  its  previous  decision  was  due  to  a  lack  of  proof  at  that 
time  that  the  prohibition  bore  some  direct  relation  to  the  public 
health  and  welfare,  and  that  subsequently  such  proof  had  been 
gathered  and  was  of  such  a  nature  as  to  warrant  a  different  de- 
cision. In  this  case  the  evidence  had  been  gathered  largely  through 
the  efforts  of  a  special  factory  investigating  commission,  but  the 
whole  incident  illustrates  the  necessity  for  a  thorough  consideration 
of  all  facts  involved  before  the  matter  is  taken  into  the  courts,  and 
making  the  results  of  such  consideration  available  for  the  use  of  the 
courts. 

The  special  order  applicable  to  a  single  establishment  is  necessary 
in  order  to  take  into  account  peculiar  conditions,  which,  if  rigidly 
applied,  might  render  the  entire  law  or  general  rule  unconstitutional. 

COURT    REVIEW. 

7.  Any  person  in  interest  to  be  entitled  to  bring  a  special  action 
in  court  to  test  the  legality  and  reasonableness  of  any  provision  of 
the  labor  laws,  of  any  rules  and  regulations  made  thereunder,  or  of 
any  order  directing  compliance  therewith.  (It  is  probably  advis- 
able, in  the  case  of  State  commissions,  to  limit  the  jurisdiction  of 
such  cases  to  a  court  sitting  at  the  State  capitol.)  Actions  involv- 
ing rules  and  regulations  and  orders  not  to  be  brought  until  final 
determination  of  the  petitions  for  review  (par.  6)  by  the  commis- 
sion. Provision  also  to  be  made  for  suspending  prosecutions  pend- 
ing determination  of  petitions  or  actions  for  review  in  court.  Mat- 
ters of  fact  which  had  not  been  before  the  commission  to  be  referred 
back  to  the  commission  and  opportunity  given  for  the  commission 
to  change  its  rules  or  regulations  before  final  decision  by  the  court. 
Rules  and  regulations  of  the  commission  to  be  made  prima  facie 
reasonable  in  all  court  proceedings. 

This  recommendation  is  provided  for  in  different  ways  in  the  dif- 
ferent State  commission  laws.  The  purpose  of  these  provisions,  to- 
gether with  those  relating  to  review  by  the  commission  (par.  6),  is 
to  secure  a  uniform  interpretation  of  the  labor  laws  and  the  rules 
and  regulations  for  carrying  them  into  effect ;  to  prevent  their  being 
held  unconstitutional  by  petty  courts  (which  often  results,  on  ac- 
count of  the  impossibility  of  appealing  such  a  decision,  in  an  abso- 
lute bar  to  further  enforcement  of  such  provisions  in  that  locality, 
even  though  the  provisions  may  eventually  be  upheld  by  a  higher 
court)  ;  and  to  protect  the  commission  from  ill-considered  action  by 
higher  courts  not  having  before  them  sufficient  information  to  enable 
them  to  arrive  at  an  intelligent  decision. 


200  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

TESTIMONY. 

8.  The  commission  to  have  the  incidental  powers  such  as  those  of 
subpoenaing  and  examining  witnesses  and  administering  oaths,  and 
so  on,  necessary  for  the  full  performance  of  duties  imposed  upon  it. 
These  powers,  however,  to  be  strictly  limited  to  those  branches  in 
which  the  commission,  on  the  basis  of  experience  or  the  constitutional 
rules  regarding  evidence,  finds  them  indispensable.     In  all  other 
work  the  commission  to  have  no  powers  of  compulsory  examination, 
and  so  on. 

The  powers  of  compulsory  investigation  and  public  hearings  are 
liable  to  serious  abuse  in  order  to  gain  some  temporary  publicity  or 
personal  advantage,  but  in  practice  it  is  found  that  competent  in- 
vestigators and  informal  conferences,  such  as  those  of  the  proposed 
advisory  councils,  can  secure  more  valuable  and  reliable  information 
than  when  individuals  are  placed  on  the  stand  and  required  to  talk 
to  the  stenographer. 

CONTINUOUS    INDUSTRY,    EMPLOYMENT,    AND    INSURANCE. 

9.  In  all  industries  or  occupations  operating  continuously  day  and 
night  and  seven  days  a  week  the  legislatures  or  Congress  should 
enact  laws  requiring  three  shifts  of  eight  hours  each  and  one  day  of 
rest  in  seven,  or  their  equivalent,  administered  under  rules  of  an  in- 
dustrial commission  laid  down  for  each  industry  or  establishment  as 
may  be  required. 

This  class  of  legislation  has  been  widely  adopted  in  European 
countries,  but  has  been  found  unenforceable  without  the  aid  of  an 
administrative  body  competent  to  take  into  account  the  many  dif- 
ferences of  different  establishments.  In  those  countries  hundreds  of 
different  rules  are  issued  for  different  industries.  For  example,  the 
rules  for  Pullman  employees  would  differ  materially  from  those  for 
steel  mills  or  hotels.  We  consider  such  laws  unenforceable  without 
this  provision,  and  their  enforcement  can  not  be  secured  without  a 
commission  under  the  supervision  of  a  representative  council  such  as 
we  recommend. 

The  Industrial  Commission,  with  its  advisory  council,  in  its  ad- 
ministration of  employment  bureaus  is  evidently  the  body  to  work 
out  improvements  not  only  in  the  bureaus  themselves  but  in  meas- 
ures designed  to  provide  for  the  unemployed  or  to  regularize  em- 
ployment, such  as  workmen's  hotels,  or  advice  to  Federal,  State,  and 
municipal  authorities  for  shifting  their  work  to  the  winter  months 
or  to  periods^  of  depression.  These  matters  have  been  remarkably 
provided  for  in  Germany,  where  the  employment  bureaus,  with  their 
advisory  councils,  have  become  the  most  effective  of  those  in  any 
country. 

Such  measures  as  sickness  insurance,  invalidity  insurance,  and 
unemployment  insurance  evidently  require  a  large  amount  of  investi- 
gation before  they  can  be  recommended.  Their  principal  object 
should  be  the  cooperation  of  employers  and  employees  in  the  preven- 
tion of  sickness,  invalidity,  and  unemployment.  Their  administra- 
tion and  the  drafting  of  laws  and  rules  will  evidently  have  to  be  in- 
trusted to  a  commission  with  such  an  advisory  council  as  is  pro- 
posed. 


EEPOET  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  201 

POLICE    AND    MILITARY. 

10.  That  such  detective  agencies  may  operate  in  more  than  one 
State,  or  be  employed  by  industrial  corporations  engaged  in  inter- 
state commerce,  or  which  may  use  the  mails  shall  be  compelled  to 
take  out  a  Federal  license,  under  the  Industrial  Commission,  with 
regulations  that  will  insure  the  character  of  their  employees  and 
the  limitation  of  their  activities  to  the  bona  fide  business  of  detecting 
crime.  Similar  license  and  regulation  for  all  private  employment 
offices  engaged  in  interstate  business. 

That  all  enterprises  shall  be  forbidden  the  right  to  employ  private 
armed  guards,  except  as  wratchmen  on  the  premises,  or  to  have  such 
watchmen  deputized  as  police  except  where  such  is  found  necessary 
by  the  State  or  Federal  Industrial  Commission.  That  rules  adapted 
to  the  differences  required  by  various  industries  should  be  made  by 
the  Industrial  Commission,  in  order  to  carry  these  laws  into  effect. 

That  such  enterprises  shall  exercise  their  right  to  call  upon  the 
constituted  authorities  to  furnish  them  with  the  necessary  protection 
to  their  property,  and  to  the  lives  of  their  workers,  against  the  threat- 
ened attack  of  rioters  or  strikers;  and  that  it  shall  be  incumbent 
upon  the  constituted  authorities  to  furnish  such  protection  in  the 
way  of  police  or  deputy  sheriffs,  and  that  a  failure  on  their  part  to 
do  this  shall  lay  the  political  subdivision  in  which  such  damage  to 
life  or  property  may  take  place  liable  to  damages.  That  all  indi- 
viduals denied  their  constitutional  rights  of  habeas  corpus,  free 
access  to  public  highways,  free  speech,  etc.,  shall  have  similar  power 
of  action  in  damages  against  the  political  division  in  which  such 
denial  takes  place.  That  all  highways  now  claimed  as  private  prop- 
erty shall  be  made  public. 

That  the  militia  of  the  several  States  being  subject  to  regulation 
by  Congress,  carefully  drawn  rules  for  their  personal  organization 
and  conduct  in  the  field  shall  be  drawn  up  by  the  War  Department, 
after  conference  with  the  Industrial  Commission  and  advisory  coun- 
cil, and  that  all  parties  arrested  by  the  militia  during  the  time  of 
troubles  shall  be  turned  over  for  trial  to  the  civil  authorities.  Simi- 
lar rules  should  be  drawn  up  by  State  authorities,  with  the  coopera- 
tion of  the  State  industrial  commission  and  its  advisory  council,  for 
the  regulation  of  State  constabulary.  The  War  Department,  with 
the  aid  of  the  Industrial  Commission  and  advisory  council,  should 
investigate  and  recommend  legislation  regarding  the  shipment  of 
arms  and  guards  in  interstate  commerce. 

One  of  the  principal  reasons  why  corporations  are  compelled  to 
employ  private  guards  is  the  failure  of  the  taxpayers  to  provide 
them.  This  is  also  one  of  the  principal  reasons  why  laborers  and 
labor  organizers  are  denied  their  constitutional  rights.  Taxpayers 
take  little  part  in  the  elections  or  otherwise  to  provide  officials  com- 
petent to  and  willing  to  protect  the  rights  both  of  capital  and  labor, 
because  the  invasion  of  these  rights  does  not  affect  them.  This  would 
be  changed  if  the  political  subdivision  were  made  liable  in  damages. 
Yet  it  is  not  proper,  as  has  been  done  in  some  States,  to  provide  for 
protection  of  property  in  this  way  without  providing  also  for  pro- 
tection of  labor  in  the  same  way.  Laws  designed  to  regulate  deputy 
sheriffs  or  the  police  force  can  not  be  made  effective  under  our  sys- 
tem of  local  government  without  liability  of  taxpayers  for  violation. 


202  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

The  drafting  of  rules  for  the  conduct  of  militia  or  State  constabu- 
lary should  not  be  left  entirely  to  military  authorities  but  should  be 
drafted  with  the  joint  discussion  and  advice  of  employers  and  em- 
ployees, who  are  more  directly  affected  than  other  classes  in  the  com- 
munity. It  is  not  intended  that  the  Industrial  Commission  or  ad- 
visory council  shall  have  a  veto  on  any  regulations  issued  by  the 
military  or  police  authorities,  but  they  should  have  opportunity  for 
criticism  and  advice.  The  entire  subject  of  policing  industry  has  not 
been  sufficiently  investigated  from  all  points  of  view,  and  more  spe- 
cific recommendations  than  these  can  not  now  be  indorsed.  It  is 
therefore  recommended  above  that  further  investigations  from  all 
points  of  view  should  be  referred  to  the  proper  Federal  and  State 
authorities,  assisted  by  the  representatives  of  all  interests  affected. 


LEGAL  AID. 


11.  State  commissions  (and  perhaps  the  Federal  Commission) 
should  render  aid  and  assistance  to  deserving  workmen  in  the  adjust- 
ment of  disputes  other  than  collective  disputes,  and  the  recovery 
of  claims  arising  out  of  their  relations  with  their  employers,  and 
generally  take  such  action  as  may  be  necessary  for  the  protection  of 
employees  from  fraud,  extortion,  exploitation,  and  other  improper 
practices.  For  this  purpose  the  commission  to  be  authorized  to 
assign  members  of  its  staff  to  appear  in  justice  and  other  courts 
which  adjudicate  such  claims,  and  to  create  local  advisory  committees 
of  employers  and  employees  to  pass  upon  all  such  claims  in  coopera- 
tion with  the  deputy  of  the  commission  and  in  advance  of  court 
procedure. 

This  recommendation  has  been  partly  adopted  in  the  New  York 
act.  An  examination  of  the  reports  of  existing  public  agencies  of 
this  sort  and  of  the  legal  aid  societies  of  the  large  cities  of  this  coun- 
try shows  that  by  far  the  largest  single  class  of  cases  with  which  they 
are  called  upon  to  deal  is  the  adjustment  of  small  wage  claims.  In 
some  communities  there  already  exist  municipal  and  other  so-called 
"  poor  men's  courts  "  and  "  small  debtors'  courts,"  intended  especially 
for  the  speedy  settlement  of  small  claims  and  disputes ;  but  even  the 
best  of  these  courts  are  scarcely  sufficient  in  themselves  to  meet  the 
situation  which  confronts  many  employees.  In  some  of  them  a  very 
large  proportion  of  disputes  over  small  wage  claims,  in  some  in- 
stances as  high  as  90  per  cent,  can  be  settled  if  the  two  parties  can 
only  be  brought  together  under  conditions  which  make  it  certain 
that  if  a  settlement  is  not  made  there  is  some  one  standing  back  of 
deserving  claimants  ready  to  push  their  cases. 

Then,  too,  these  cases  frequently  involve  a  general  practice  from 
which  many  individuals  suffer,  and  yet  it  is  impractical  for  any  one 
of  them  to  take  the  necessary  action  to  secure  redress  or  put  an  end 
to  the  practice.  Members  of  a  given  class  are  often  made  the  victims 
of  exploitation  or  improper  practices  under  conditions  where  it  is 
not  practical  nor  worth  while  for  any  individual  to  fight  the  matter 
out.  and  yet  where  the  aggregate  loss  to  the  class  is  considerable. 
The  ordinary  shipper  is  generally  able  to  pay  for  necessary  legal 
services,  and  still  Congress  and  a  number  of  the  State  legislatures 
have  required  the  Interstate  Commerce  Commission  and  the  State 
commissions  to  render  just  such  aid  to  shippers  having  claims  against 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  203 

railroads,  because  of  the  economic  disadvantage  in  which  an  indi- 
vidual shipper  is  placed  in  a  contest  with  the  railroads.  That  em- 
ployees stand  in  need  of  such  protection  from  the  State  is  evidenced 
by  the  mass  of  labor  legislation  which  has  been  enacted  and  the 
agencies  which  have  been  created  for  its  administration. 

Nor  does  such  provision  lack  precedents  other  than  the  railroad 
legislation  already  referred  to.  For  some  years  the  bureau  of 
industry  and  immigration  of  the  New  York  Labor  Department  has, 
in  cooperation  with  the  New  York  Legal  Aid  Society,  extended  just 
such  assistance  to  immigrants,  and  almost  the  exact  provision  here 
recommended  has  been  included  in  the  industrial  commission  law 
just  enacted  in  New  York. 

Kansas  City  maintains  its  own  legal  aid  bureau  as  part  of  the 
city  government,  and  of  the  five  or  six  thousand  cases  a  year  han- 
dled by  it,  almost  half  are  wage  claims.  The  largest  class  of  cases 
handled  by  the  public  defender  of  Los  Angeles  is  wage  claims. 

The  above  recommendation  is  intended  to  establish  in  the  United 
States  a  system  analogous  to  the  industrial  courts  of  France,  Ger- 
many, and  other  European  countries.  But  it  can  not  be  expected 
that  many  localities  will  initiate  this  class  of  courts,  and  it  will 
require  a  State  commission  to  make  them  general.  If  municipalities 
were  given  authority  and  then  actually  established  such  courts,  the 
State  commission  would  withdraw. 


LEGISLATION. 


12.  The  Industrial  Commission,  upon  request  of  the  legislature  or 
Congress,  or  the  committee  on  relations  between  capital  and  labor, 
to  investigate  a  subject  and  draft  bills.  The  commission  to  make 
recommendations  regarding  legislation  affecting  subjects  under  its 
jurisdiction. 

It  is  not  proposed  that  the  Industrial  Commission  shall  initiate 
legislation  or  make  recommendations,  except  on  laws  previously 
assigned  to  it  for  administration.  Matters  outside  its  jurisdiction 
would  bring  it  into  the  political  and  controversial  field.  Yet  when 
Congress  or  the  legislature  is  considering  new  legislation,  such  as 
sickness  insurance,  unemployment  insurance,  and  so  on,  it  might 
refer  the  matter,  in  its  own  discretion,  for  further  investigation  and 
recommendation.  Advanced  legislation  is  fought  out  by  lobbies 
and  in  committees,  and  the  advantage  of  reference  to  the  Industrial 
Commission  would  be  the  cooperation  of  its  advisory  council  in  draft- 
ing a  workable  law,  eliminating  "  jokers,"  and  carrying  out  the  intent 
of  the  legislature.  At  present  there  is  no  definite  means  provided 
whereby  lobbyists  can  be  required  to  come  together  and  confer 
regarding  measures.  They  appear  usually  as  antagonists  or  lawyers 
before  legislative  committees,  and  not  as  the  conferees  of  an  advisory 
representative  council.  This  proposition  is  by  no  means  a  novel  or 
untried  one.  After  fruitless  administration  of  the  impractical  coal- 
mining laws,  which  had  been  placed  on  the  statute  books  mainly 
by  the  labor  unions  of  Illinois  and  Colorado,  the  legislature  turned 
the  matter  of  revising  the  mining  code  over  to  a  joint  committee 
selected  by  the  coal  operators  and  the  mine  workers'  union,  and 
then  enacted  into  law,  without  amendment,  the  code  which  the  two 


204  REPORT  OF   COMMISSION    OX   INDUSTRIAL   RELATIONS. 

opposing  interests,  in  conference  with  the  legislative  committee, 
jointly  recommended.  The  advisory  committee  on  apprenticeship 
of  the  Wisconsin  commission  has  recently  agreed  upon  an  apprentice- 
ship law  satisfactory  to  employers,  trade  unions,  and  the  commission, 
and  this  was  adopted  by  the  legislature  without  change.  This 
method  of  legislation  can  be  indefinitely  extended  to  all  matters,  with 
the  result  that,  while  both  sides  protect  their  own  interests,  they 
:  often  eventually  reach  agreement  on  points  where  their  interests  and 
those  of  the  public  are  common. 

This,  of  course,  does  not  do  away  with  the  final  authority  of  Con- 
gress or  the  legislature,  nor  with  the  battle  of  opposing  interests  in 
the  legislative  branch  of  government  where  they  have  not  been  able 
to  agree,  nor  where  other  interests  are  affected.  Here  is  the  proper 
place  for  the  lobbyists  of  both  sides  to  endeavor  to  get  the  support 
of  representatives  of  the  people,  and  to  override  the  other  side. 
There  could  not  be  much  of  the  advanced  legislation  required  to  meet 
the  problems  of  capital  and  labor  without  a  struggle  in  the  legis- 
lature or  Congress  on  new  issues.  But  when  the  legislature  is  ready 
to  take  an  advanced  step,  it  is  an  advantage  to  require  the  com- 
batants to  confer  on  the  details  and  to  subject  their  differences  to 
investigation  by  an  impartial  body  on  which  they  have  representa- 
tion. This  advantage  is  intended  in  the  above  recommendation. 

SUPREME    COURTS. 

13.  At  the  request  of  the  Supreme  Court  (State  or  Federal)  the 
Industrial  Commission  shall  investigate  and  report  upon  any  ques- 
tions of  fact  referred  to  it  by  the  court  and  bearing  upon  the  con- 
stitutionality or  reasonableness  of  any  Federal  or  State  statute  or 
administrative  rule  on  the  relations  of  employer  and  employee. 
Amendment  of  the  judicature  act  so  as  to  permit  a  State  to  appeal 
from  its  own  supreme  court  to  the  Federal  Supreme  Court  on  a 
decision  against  a  State  based  on  conflict  with  the  Federal  Constitu- 
tion. 

While  the  principles  of  law  are  held  to  be  settled  and  unchange- 
able, their  applications  change  when  conditions  change.  Decisions  of 
the  courts  on  the  constitutionality  of  labor  laws  often  turn  on  the 
information  which  is  placed  before  the  court  as  to  the  necessity  of 
the  law.  The  Supreme  Court  declared  an  eight-hour  law  for  miners 
constitutional  and  a  ten-hour  law  for  bakers  unconstitutional  largely 
because  it  was  furnished  with  conclusive  information  on  conditions 
in  the  mines  but  not  in  the  bakeries.  (Holden  v.  Hardy,  1898,  169 
U.  S.  366;  Lochner  v.  New  York,  1907,  198  U.  S.  45.)  the  court  of 
New  York  in  1907  declared  (People  v.  Williams,  189  N.  Y.  131)  a 
law  prohibiting  night  work  for  women  unconstitutional,  but  held  a 
similar  law  constitutional  in  1915  (People  v.  Schweinler  Press,  214 
N.  Y.  395),  and  gave  as  the  reason  for  its  change  of  opinion  the 
evidence  placed  before  it  in  the  second  case.  The  court  said  in  1915  : 

1.  It  is  urged  that  whatever  might  be  our  original  views  concerning  this 
statute,  our  decision  in  People  v.  Williams  (1907)  is  an  adjudication  which 
ought  to  hind  us  to  the  conclusion  that  it  is  unconstitutional.  While  it  may 
be  th.it  this  argument  is  not  without  an  apparent  and  superficial  foundation 
and  ought  to  be  fairly  met,  I  think  that  a  full  consideration  of  the  Williams 
case  and  of  the  present  one  will  show  that  they  may  be  renlly  and  substantially 
differentiated,  and  that  we  should  not  be  and  are  not  committed  bv  what  was 


, 

saW 


KEPORT  OF   COMMISSION   ON    INDUSTRIAL   RELATIONS.  205 


Ui. 

P'-1 


and  decided  in  the  former  to  the  view  that  the  legislature  had  no  power 
to  adopt  the  present  statute.     *     *     * 

While  theoretically  we  may  have  been  able  to  take  judicial  notice  of  some 
of  the  facts  and  some  of  the  legislation  now  called  to  our  attention  as  sustain- 
the belief  and  opinion  that  night  work  in  factories  is  widely  and  substan- 
ally  injurious  to  the  health  of  women,  actually  very  few  of  these  facts  were 
lied  to  our  attention,  and  the  argument  to  uphold  the  law  on  that  ground  was 
rief  and  inconsequential. 

Especially  and  necessarily  was  there  lacking  evidence  of  the  extent  to  which 
during  the  intervening  years  the  opinion  and  belief  have  spread  and  strength- 
ened that  such  night  work  is  injurious  to  women ;  of  the  laws,  as  indicating 
such  belief,  since  adopted  by  several  of  our  own  States  and  by  large  European 
countries,  and  the  report  made  to  the  legislature  by  its  own  agency,  the  factory 
investigating  commission,  based  on  investigation  of  actual  conditions  and  study 
of  scientific  and  medical  opinion  that  night  work  by  women  in  factories  is  gen- 
erally injurious  and  ought  to  be  prohibited. 

Other  illustrations  might  be  given  showing'  the  way  in  which 
courts  respond  to  the  needs  of  progressive  legislation  when  once  they 
have  before  them  ascertained  facts.  Investigations  by  attorneys  or 
interested  parties  may  have  a  certain  weight  in  court,  but  the  weight 
can  not  be  as  great  as  the  investigations  and  findings  of  an  impartial 
commission,  supervised  by  representatives  of  the  interests  affected 
by  the  decision.  Criticism  of  the  courts  for  decisions  overturning 
laws  designed  to  protect  labor,  and  the  demands  for  constitutional 
amendments  depriving  the  court  of  power  to  declare  laws  unconsti- 
tutional, or  providing  for  recall  of  decisions  or  recall  of  judges,  often 
fail  to  reach  the  real  difficulty.  The  difficulty  is  that  bureaus  or 
departments  of  labor  and  statistics  have  been  so  incompetently  man- 
aged or  their  investigations  so  remote  from  the  concrete  facts  that 
need  to  be  established  that  the  courts  have  had  no  reliable  informa- 
tion and  have  been  compelled  to  fall  back  on  their  own  meager 
information  or  "  common  knowledge."  If  the  court  had  at  hand  a 
reliable  and  well-equipped  referee  with  power  to  get  the  facts,  as  in 
the  Industrial  Commission,  it  is  probable  that  it  would  call  upon 
such  referee  instead  of  basing  its  judgment  on  the  doubtful  claims 
and  technical  arguments  of  attorneys. 

It  will  be  noted,  however,  that  this  recommendation  is  merely  sup- 
plementary to  those  in  paragraphs  G  and  7.  In  those  paragraphs 
the  rules  and  regulations  of  the  commission  itself  dealing  with  labor 
conditions  are  tested  before  the  court,  and  they  are  made  prima  f?.cie 
valid  and  reasonable  as  based  on  adequate  investigation.  The  present 
recommendation  is  optional  with  the  court  and  may  pertain  to  an 
act  of  the  legislature  or  the  rule  of  an  administrative  body  upon 
which  the  court  is  not  reliably  informed  as  to  the  facts. 

A  provision  similar  to  this  is  included  in  the  recent  Federal  Trade 
Commission  act  (sec.  7). 

The  recommendation  for  amendment  by  Congress  of  the  judicature 
act  is  based  on  the  fact  that  private  individuals  or  corporations  can 
now  appeal  to  the  Federal  courts  if  the  decision  of  the  State  court  is 
against  them,  on  the  ground  of  conflict  with  the  Federal  Constitu- 
tion, but  the  State  itself  can  not  appeal  if  its  own  State  court  has 
decided  against  the  State  on  the  ground  that  the  State  law  conflicts 
with  the  Federal  Constitution.  It  is  sufficient  that  a  State  court 
should  decide  issues  under  the  State  Constitution,  but  the  Federal 
Supreme  Court  alone  should  decide  finally  all  issues  under  the  Fed- 
eral Constitution.  With  the  provision %  that  the  Supreme  Court 


206  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

should  require  the  Industrial  Commission  to  investigate  and  report 
upon  the  facts  which  are  alleged  to  justify  the  State  legislation  in 
question,  the  way  is  prepared  for  the  Supreme  Court  to  have  before 
it  the  economic  and  social  facts  necessary  to  pass  intelligently  upon 
these  questions  of  constitutionality. 

MEDIATION    AND    MINIMUM    WAGE. 

1-i.  The  Industrial  Commission  (State  or  Federal)  shall  appoint, 
remove,  and  fix  the  compensation  of  a  chief  mediator  of  industrial 
disputes,  the  chief  mediator  to  hold  his  position  until  removed  by 
the  Industrial  Commission  and  to  appoint  such  assistants  as  may  be 
needed,  and  to  fix  their  compensation  with  the  approval  of  the  Indus- 
trial Commission.  He  should  appoint  temporary  mediators  for  spe- 
cial cases,  without  requiring  them  to  give  up  their  private  business 
or  offices. 

The  chief  mediator  and  all  assistant  mediators  to  be  selected  from 
an  eligible  list  prepared  by  the  Civil  Service  Commission  on  a 
nonassembled  examination,  with  the  assistance  of  the  Industrial 
Commission  and  the  advisory  council. 

The  chief  mediator  and  his  staff  to  have  no  powers  whatever  of 
compulsory  testimony  and  to  be  prohibited  from  arbitrating  any 
dispute,  from  making  any  public  recommendation,  or  from  revealing 
in  any  way,  directly  or  indirectly,  any  information  which  they  may 
have  secured  from  any  parties  relative  to  an  industrial  dispute.  Any 
violation  to  be  sufficient  ground  for  immediate  removal  by  the  Indus- 
trial Commission.  The  powers  of  the  mediators  to«be  those  solely 
of  voluntary  mediation  or  conciliation,  but  the  chief  mediator  shall 
offer  his  services  in  confidence  to  both  sides  of  a  dispute  which,  in 
his  judgment,  is  of  public  importance. 

The  chief  mediator  and  his  staff  to  be  wholly  independent  of  the 
Industrial  Commission,  except  as  to  appointment  and  removal,  to 
the  extent  that  they  be  prohibited  from  reporting  any  facts  or  rec- 
ommendations whatever  to  the  Industrial  Commission  or  any  other 
authority  relative  to  the  merits  of  any  industrial  dispute. 

In  case  the  mediator  is  unable  to  secure  an  agreement  through  con- 
ciliation, he  shall  recommend  arbitration  to  both  parties,  and  if  both 
consent  to  abide  by  the  decision  of  arbitrators  he  shall  proceed  to 
assist  them  in  selecting  a  board  of  arbitration  in  any  w7ay  and  con- 
sisting of  any  number  of  members  that  both  sides  may  agree  upon. 
If  agreement  is  not  reached  within  a  specified  time  on  the  third 
party  to  the  board  of  mediation,  the  chief  mediator  shall  appoint  the 
same. 

In  case  both  parties  do  not  consent  to  arbitration  the  mediator 
shall  recommend  the  appointment  of  a  board  of  mediation  and  in- 
vestigation, which  shall  have  power  to  make  public  its  findings  and 
recommendations,  but  such  recommendations  shall  not  be  binding 
on  any  person.  If  both  parties  shall  consent  to  such  a  board,  the 
mediator  shall  assist  them  in  creating  the  same  and  shall  appoint  the 
third  member,  if  the  parties  can  not  agree  on  the  same  within  a 
specified  number  of  days. 

In  case  both  parties  accept  either  a  board  of  arbitration  or  a  board 
of  mediation  and  investigation,  such  board,  as  the  case  may  be,  shall 


EEPOET  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  207 

ta ve  power  of  compelling  testimony.  The  Newlands  Act  and  the 
Department  of  Labor  act  should  be  so  amended  that  all  mediation 
and  conciliation,  whether  on  railways  or  in  other  industries,  shall 
be  consolidated  under  the  mediator  of  the  Federal  Industrial  Com- 
mission. The  Federal  commission  should  cooperate  with  State 
mediators. 

In  the  case  of  women  and  children,  minimum  wage  boards  should 
be  created  by  the  State  industrial  commissions. 

The  foregoing  recommendation  is  intended  to  provide  for  strictly 
"  voluntary  "  methods  of  mediation  and  arbitration.  When  engaged 
in  this  branch  of  its  work  the  commission  is  not  only  prohibited  from 
using  its  compulsory  powers,  but  its  mediation  work  is  so  rigidly 
separated  from  its  other  work  that  it  can  not  even  be  suspected  of 
using  the  coercive  power  of  Government  to  favor  either  side.  The 
mediator  and  his  staff  are  to  be  strictly  confidential  advisors  to  the 
opposing  interests,  without  the  power  of  Government,  or  even  the 
threat  of  using  that  power,  to  coerce  either  side  of  a  collective  dis- 
pute. If  coercion  is  used  in  the  form  of  "  compulsory  testimony  "  it 
is  only  with  the  previous  voluntary  consent  of  both  sides. 

The  reasons  for  reaching  this  conclusion,  and  for  recommending 
that  in  other  branches  of  its  work  the  proposed  commission  shall 
have  the  ordinary  coercive  powers  of  Government,  are  based  on  the 
fundamental  distinction  between  collective  bargaining  and  the  in- 
dividual labor  contract.  The  principle  in  general  is,  that  Govern- 
ment should  not  employ  its  coercive  powers  to  regulate  collective  bar- 
gaining, but  should,  in  certain  matters,  employ  the  force  of  law  and 
administration  to  regulate  the  individual  labor  contract.  It  does  the 
latter  through  laws  on  child  labor,  hours  of  labor,  safety  and  health, 
workmen's  compensation,  sickness  insurance,  minimum  wage,  and 
so  on. 

Collective  bargaining,  in  its  last  analysis,  is  based  upon  the  coer- 
cive power  of  antagonistic  classes  organized  for  aggression  and  de- 
fense. The  bargaining  power  of  either  side  is  the  power  to  use 
the  strike  against  the  lockout,  the  boycott  against  the  blacklist,  the 
picket  against  the  strikebreaker,  the  closed  union  shop  against  the 
closed  nonunion  shop,  and  so  on.  These  are  essential  weapons,  and  no 
plausible  verbiage  or  double  meaning  of  words  should  blind  us  to  the 
fact  that  these  weapons  are  coercive,  and  are  intended  to  be  coercive, 
and,  in  the  last  analysis,  will  be  used,  secretly  or  openly,  as  coercive, 
by  either  side.  Their  object  is  similar  to  legislation  regulating  the 
individual  labor  contract  except  that  they  regulate  it  through  joint 
agreement  backed  by  their  coercive  weapons,  instead  of  fines  and 
imprisonment. 

The  question  then  is,  Shall  the  coercive  power  of  Government  be 
used  to  deprive  one  side  or  the  other,  or  both  sides,  of  any  or  all  of 
their  coercive  weapons  designed  to  control  the  individual  labor  con- 
tract? 

The  most  extreme  use  of  this  power  is  known  as  compulsory  arbi- 
tration. Here  the  Government  attempts  to  deprive  both  sides  of  all 
coercive  weapons  by  completely  prohibiting  strikes,  lockouts,  boy- 
cotts, blacklists,  picketing,  and  strikebreaking,  and  by  preventing 
either  side  from  using  its  methods  of  strategy  designed  to  overcome 
the  other  side. 


208  REPORT  OF   COMMISSION   OX   INDUSTRIAL   RELATIONS. 

But  the  Government  may  use  its  coercive  power  to  deprive  either 
side  of  only  a  part  of  its  weapons  or  strategies.  Arbitration,  or  a 
joint  agreement,  consists  of  several  steps,  and  at  each  step  each  side 
either  employs  its  weapons  or  else  resorts  to  strategy  in  order  to 
play  for  position  and  to  gain  an  advantage  when  it  comes  to  using 
the  weapons. 

The  first  step  in  strategy  of  collective  bargaining  is  recognition  of 
the  union ;  that  is,  recognition  by  the  employer  of  the  representatives 
of  the  union  by  consenting  to  confer  with  them.  How  important  this 
preliminary  step  is  considered  by  both  sides  is  shown  by  the  mean- 
ing which  they  give  to  the  term  "  recognition."  To  "  recognize  a 
union  "  is  considered  to  be  not  to  merely  hold  a  conference  with  its 
agents,  but  also  to  investigate  grievances  and  demands,  to  negotiate 
concerning  the  terms  of  a  collective  agreement,  and  even  to  employ 
union  men  on  terms  consented  to  by  the  union.  Strictly  speaking, 
these  are  not  "  recognition,"  but  are  steps  in  collective  bargaining 
that  follow  recognition.  Recognition  in  the  ordinary  use  of  the  term 
(the  one  here  usecl)  would  be  merely  a  conference  in  which  the  em- 
ployer meets  certain  individuals,  not  as  individuals  but  as  recognized 
agents  of  the  union  authorized  to  speak  on  behalf  of  his  employees. 
But  it  is  so  well  understood  that  recognition,  even  in  this  limited 
sense,  will  be  followed  by  other  steps,  that  the  decisive  battle  is  often 
fought  out  at  this  point.  The  employer  knows  that,  if  he  meets  the 
leaders,  the  union  has  gained  an  advantage.  He  has  acknowledged 
to  all  nonunionists  and  timid  unionists  in  his  shop  that  the  union 
is  something  he  can  not  ignore,  and  this  is  a  flag  of  truce  and  a  con- 
cession for  his  employees  to  join  the  union  or  come  out  openly  on 
its  side.  By  just  so  much  he  has  weakened  his  bargaining  power 
against  the  union.  Consequently,  if  he  has  decided  not  to  have  a 
certain  union  in  his  shop  he  must  refuse  at  the  very  beginning  to 
confer  with  its  agents. 

If,  then,  the  Government  steps  in  and  compels  both  sides  to  confer, 
it  may  take  the  first  step  in  the  name  of  "  compulsory  investigation  " 
or  "compulsory  testimony,"  without  power  to  prevent  a  strike  or 
lockout.  If  the  Government  is  given  power  to  step  in  and  compel 
the  employer  and  employee  to  testify,  to  produce  papers  and  records, 
it  is  attempting  to  substitute  compulsion  for  voluntary  consent  at 
two  important  steps  of  collective  bargaining.  It  introduces  com- 
pulsory recognition  and  compulsory  negotiation1  under  the  guise  of 
"  compulsory  testimony."  The  mere  compulsion  on  employers, 
through  prosecutions,  as  proposed  by  our  colleagues,  to  compel  em- 
ployers to  confer  with  unions,  can  have  no  result,  unless  it  be  accom- 
panied by  compulsion  to  investigate,  as  in  the  Canadian  and  Colo- 
rado acts,  or  to  arbitrate,  as  in  Australia.  If  employers  are  com- 
pelled merely  to  confer  they  can,  of  course,  reject  all  propositions, 
and  the  nominal  recognition  of  the  union  thereby  secured  would  only 
be  a  further  opportunity  for  declaring  their  determination  not  to 

1  Those  forms  may  appear  ridiculous,  but  thoy  nro  not  more  ridiculous  than  tho  torm 
"compulsory  arbitration."  Arbitration,  strictly  speaking,  is  the  voluntary  consont  of 
both  parties  to  refer  a  dispute  to  a  third  person  and  to  accept  and  carry  out  his  decision. 
It  is  no  longer  "  arbitration  "  if  the  Government  coerces  the  parties  by  constituting  itself 
the  third  party  and  compelling  them  to  accept  and  carry  out  the  decision.  But  if,  in  com- 
mon xisaKo,  we  have  ajrn'od  to  forgot  the  absurdity  of  compulsory  arbitration,  we  can  also 
forget  the  same  absurdity  in  the  terms  "  compulsory  recognition'"  and  "  compulsory  nego- 
tiation." 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  209 


recognize  the  union.  If  such  a  law  is  intended  to  accomplish  any- 
thing it  should  go  further  and  compel  the  employers  to  submit  to 
compulsory  investigation  or  compulsory  arbitration,  and  this  would 
mean  compulsion  also  on  the  unions  to  confer  and  testify  or  to  arbi- 
trate. 

In  our  hearings  in  San  Francisco  we  found  unions  that  refused  to 
meet  the  employers  for  a  joint  agreement,  but  required  them  to  sign 
up  individually  the  demands  which  the  unions  had  already  decided 
upon.  This  can  not  properly  be  called  collective  bargaining  or  rec- 
ognition of  an  employers'  association  any  more  than  the  decision  of 
employers  not  to  deal  collectively  but  to  deal  with  their  employees 
individually.  A  law  requiring  employers  to  confer  with  and  recog- 
nize unions  should  also  require  unions  to  confer  with  and  recognize 
employers,  and  if  this  is  made  effective  it  would  result  in  something 
like  the  Canadian  or  Colorado  acts^  described  below.  Employers 
who  are  strongly  fortified  against  unions  object  to  compulsory  testi- 
mony because  it  weakens  their  bargaining  power,  but  employers 
dealing  with  strong  unions  desire  it  because  by  recognizing  the  union 
they  have  already  consented  to  investigation.  Their  next  step  is  to 
compel  the  unions  to  wait  for  the  investigation  before  striking. 

This  next  step  in  collective  bargaining  is  usually  a  provision  that 
both  sides  shall  continue  at  work  or  return  to  work  while  investiga- 
tion and  determination  is  in  progress.  This  is,  of  course,  the  great 
object  of  arbitration,  and  practically  all  voluntary  methods  provide 
that  work  shall  continue  while  arbitration  is  going  on.  This  provi- 
sion is  recognized  in  the  Canadian  industrial  disputes  investigation 
act,  latterly  adopted  by  New  Zealand  and  Colorado.  The  Govern- 
ment prohibits  either  side  from  a  strike  or  lockout  for  30  days, 
pending  compulsory  testimony  and  recommendation,  but  the  parties 
are  not  compelled  to  accept  the  recommendation.  After  the  30  days 
have  expired  they  may  start  their  strike  or  lockout  without  any 
legal  penalty.  The  Government  meanwhile  invites  each  side  to 
appoint  its  representatives  on  a  board  of  investigation  and  media- 
tion and  the  two  to  select  a  third  member.  If  either  side  refuses  to 
appoint  its  representative  the  Government  steps  in  and  names  the 
representative.  If  both  sides  are  unable  to  agree  on  the  third  mem- 
ber the  Government  again  steps  in  and  names  the  third  member.  In 
other  words,  the  Government  coerces  each  side  to  go  through  the 
same  forms  that  they  would  do  if  they  agreed  voluntarily  to  refer  a 
dispute  to  arbitration,  and  it  prohibits  them  from  strike  or  lockout 
pending  a  finding  and  recommendation.  This  is  compulsory  recog- 
nition, compulsory  negotiation,  compulsory  testimony,  and  compul- 
sory labor  pending  investigation,  but  without  compulsion  after  inves- 
tigation. 

On  the  other  hand,  the  weak  union  favors  compulsory  conference 
and  recognition  because  it  seems  to  give  it  an  advantage  in  bargain- 
ing. Both  strong  and  weak  unions  are  opposed  to  compulsory  testi- 
mony because  they  get  the  equivalent  by  recognition,  and  they  fear 
that  it  will  lead  to  the  compulsory  waiting  of  the  Canadian  act.  For 
these  reasons  the  Canadian  system  should  be  put  in  the  same  class 
as  compulsory  arbitration,  since  the  Government  interferes  to  weaken 
or  strengthen  the  collective  bargaining  power  of  either  side.  This 

38819°— 1C 14 


210  REPORT  OF   COMMISSION    OX   INDUSTRIAL  RELATIONS. 

is  the  essential  point  of  Government  intervention.  The  term  "  arbi- 
tration" is  misleading  because  it  signifies  the  voluntary  agreement 
on  an  umpire  and  the  voluntary  acceptance  of  his  award.  But  arbi- 
tration can  not  be  voluntary  When  the  Government  throws  its  coer- 
cive power  to  one  side  or  the  other  by  appointing  a  representative 
of  either  side,  or  an  umpire,  on  the  arbitration  board  without  the 
consent  of  both  sides.  This  is  coercive  interference  with  collective 
bargaining  power,  which  is  the  essential  element  in  compulsory  arbi- 
tration. 

For  this  reason  it  can  not  be  claimed  that  the  Canadian  system  is 
"  voluntary  arbitration."  This  term  is  also  misleading.  Collective 
bargaining  is  not  voluntary  in  the  same  sense  that  individual  bar- 
gaining is  voluntary,  since  it  depends  on  certain  coercive  weapons 
such  as  strikes,  boycotts,  blacklists,  and  so  on,  together  with  strategy 
in  using  these  weapons,  and  these  are  not  instruments  in  individual 
bargaining.  All  that  is  meant  by  voluntary  arbitration  is  that  the 
Government  does  not  use  its  coercive  power  to  weaken  or  strengthen 
the  collective  coercion  of  either  side. 

The  first  object  of  the  Canadian  law  is  the  commendable  one  of 
bringing  both  parties  together  for  investigation  of  the  demands  and 
grievances,  with  the  hope  that,  by  delaying  hostilities  for  30  days, 
time  will  be  given  for  mediation,  conciliation,  and  a  voluntary  agree- 
ment. For  this  reason  the  boards  created  are  properly  called  boards 
of  "mediation  and  investigation."  It  often  occurs  that  within  the 
30  days  both  sides  reorh  such  a  voluntary  agreement  and,  if  so,  the 
board  is  dissolved  after  approving  the  agreement. 

The  second  object  is,  in  case  a  voluntary  agreement  is  not  reached 
by  this  kind  of  mediation  within  30  days,  that  the  publication  of  a 
set  of  recommendations  by  the  board  will  bring  to  bear  the  pressure 
of  public  opinion  on  both  sides  so  that  they  will  feel  obliged  to  accept 
the  recommendations  and  continue  at  work.  Compulsory  recogni- 
tion, negotiation,  and  testimony  are  used  as  the  means  of  coercion 
through  the  support  that  public  opinion  may  give  to  the  Government. 

But  mere  public  opinion  is  not  enough  to  accomplish  this  object. 
The  next  step  is  the  compulsory  arbitration  of  Australasia,  which 
brings  the  power  of  fine  and  imprisonment  to  enforce  an  award  made 
by  a  public  official. 

It  is  believed  that  any  of  these  compulsory  methods  are  unsuited 
to  American  conditions,  and  that  the  foregoing  recommendation  for 
a  voluntary  board  of  investigation,  adapted  from  the  Canadian  act 
but  without  its  compulsory  features,  will  prove  a  valuable  addition 
to  the  present  Newlands  Act,  which  goes  only  as  far  as  voluntary 
arbitration  in  interstate  railroad  disputes.  If  one  party  or  the  other 
refuses  to  accept  a  board  of  arbitration  with  power  to  make  a  bind- 
ing award,  it  is  proposed  that  the  mediator  shall  invite  both  to  create 
a  board  of  investigation  with  power  to  take  testimony  and  to  make 
recommendations  which  are  not  binding  as  an  award.  The  jurisdic- 
tion of  the  Newlaads  Act  is  proposed  to  be  extended  tinder  the 
Federal  Commission  to  all  labor  disputes  in  all  industries  engaged 
in  interstate  commerce.  It  is  believed  that  in  many  cases  of  serious 
public  concern  neither  side  can  afford  to  reject  an  offer  on  the  part 
of  the  Government  to  use  its  powers  of  compulsory  testimony  to 
ascertain  the  facts  and  to  make  recommendations,  provided  the 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  211 

parties  retain  their  liberty  to  reject  the  recommendations.  The  value 
of  this  proposal  consists  in  the  probability  that  a  thorough  investi- 
gation, participated  in  by  both  sides,  may  lead  to  agreement,  as  it 
has  often  under  the  Canadian  act.  But  this  should  be  brought  about 
by  consent  of  both  parties  and  not  by  compulsory  representation  of 
either  side,  nor  compulsory  postponement  of  hostilities,  as  provided 
in  the  Canadian  act. 

The  intent  of  the  foregoing  recommendation  is  that  the  mediator 
shall  use  all  of  the  powers  of  persuasion  that  he  can  summon  but  is 
not  to  use,  nor  to  be  in  a  position  to  threaten  or  even  to  suggest  the 
use  of,  any  powers  of  coercion.  Even  compulsory  testimony  is  to 
be  used  only  in  case  he  can  persuade  both  parties  to  consent  to  its  use. 
The  mediator  is  not  even  permitted  to  make  public  any  information 
he  may  acquire  regarding  a  dispute,  or  to  give  that  information  to 
the  Industrial  Commission  or  to  any  other  public  authority  that  has 
the  power  of  governmental  coercion.  Mediation  and  arbitration  are 
to  be  voluntary  throughout,  as  far  as  government  is  concerned. 

The  case  is  different  with  individual  bargaining.  Here  it  is  recog- 
nized that  the  individual  worker  is  at  a  disadvantage  with  the  em- 
ployer. In  fact,  he  usually  makes  no  bargain  at  all.  He  merely 
accepts  or  rejects  the  terms  offered  by  the  employer.  Where  this  is 
so,  and  there  is  a  public  interest  to  be  gained,  Congress  or  the  legisla- 
tures and  the  industrial  commissions  should  exercise  adequate  com- 
pulsory powers  to  equalize  and  protect  the  bargaining  power  of  indi- 
vidual employees. 

It  should  be  remembered  that  in  the  eyes  of  the  law  the  labor  con- 
tract is  an  individual  contract — a  contract  between  an  individual 
workman  and  an  individual  employer.  Even  if  the  employer  is  a 
corporation  of  thousands  of  stockholders  and  bondholders,  they  are 
treated  as  a  single  individual  for  the  purposes  of  a  contract.  But 
the  law  does  not  usually  recognize  a  collective  or  joint  agreement 
between  a  union  and  an  employer  or  employers'  association  as  a  con- 
tract. The  courts  will  not  usually  enforce  it  as  they  enforce  indi- 
vidual contracts.  Such  a  contract,  so  called,  will  not  bind  anybody 
by  the  force  of  law.  A  contract  with  a  trade-union  is  not  a  contract 
in  law;  it  is  merely  an  understanding,  or  a  usage,  or  a  joint  agree- 
ment that,  when  the  real  labor  contract  is  made  between  individual 
employer  and  employee,  it  will  be  made  according  to  the  terms  of 
the  joint  agreement.  If  an  individual  employer  breaks  the  agree- 
ment by  hiring  a  workman  on  different  terms,  the  only  means  that 
the  union  has  of  enforcing  the  agreement  is  that  of  a  strike.  It  is 
not  a  breach  of  contract.  The  union  can  not  usually  get  an  injunc- 
tion or  damages  in  court  on  account  of  the  violation.  In  the  same 
way  the  employer's  only  practicable  remedy  is  the  lockout.  He 
probably  can  not  bring  a  suit  for  damages,  because  the  union  agree- 
ment was  not  a  contract.  The  legislature  might,  of  course,  change 
the  law  and  provide  for  the  legal  enforcement  of  the  collective  bar- 
gain. This  would  be  compulsory  arbitration.  But  as  it  now  stands 
a  joint  trade  agreement  is  a  kind  of  usage  or  understanding  agreed  to 
by  two  opposing  interests  and  generally  enforced  on  individuals  by 
the  coercive  weapons  of  strike,  lockout,  boycott,  or  blacklist.  It 
differs  from  a  statute  in  the  fact  that  its  enforcement  is  left  to  pri- 
vate organizations  or  individuals  while  the  enforcement  of  a  statute 


212  REPORT  OF   COMMISSION   OX   INDUSTRIAL  RELATIONS. 

or  order  of  a  commission  is  effected  by  the  penalties  of  imprisonment, 
fines,  or  damages.  A  minimum  wage  law,  for  example,  may  differ  in 
no  respect  from  a  joint  agreement  with  a  union,  except  that  the  one 
is  enforced  by  legal  penalties  or  the  threat  of  penalties,  and  the  other 
by  a  strike  or  the  threat  of  a  strike. 

The  practical  conclusion  to  be  drawn  from  this  distinction  is  that, 
since  a  State  industrial  commission  may  be  both  a  mediator  and  a 
minimum  wage  commission,  it  should  act  only  as  a  voluntary  medi- 
ator where  a  union  is  actually  in  operation  and  securing  agreements. 
But  where  there  is  no  effective  union  there  the  minimum  wage  should 
apply.  This  is  the  condition  of  women  and  child  workers,  and  for 
them  the  State,  but  not  the  Federal  commission,  should  create  ad- 
visory minimum  wage  boards,  which,  acting  with  the  women  inspec- 
tors of  the  commission,  should  make  investigation  and  recommend 
the  minimum  wage  and  other  conditions  to  the  industrial  commis- 
sion. The  last  named  would  then  hold  public  hearings  and  the  rules 
of  law  would  apply  as  already  outlined  in  preceding  paragraphs. 

The  same  principle  applies  to  other  labor  legislation  which  regu- 
lates the  individual  labor  contract,  such  as  child  labor  laws,  work- 
men's compensation,  safety,  health,  employment  offices,  legal  aid, 
mechanics'  liens,  and  so  on.  These  are  matters  which  are  not  usually 
an  issue  in  collective  bargaining  even  of  unions  composed  of  men, 
and  do  not  usually  lead  to  strikes  or  lockouts.  Neither  is  the  indi- 
vidual workman,  in  making  his  contract  of  employment,  able  to 
protect  himself  in  these  matters.  When  government  here  comes  to 
the  aid  of  the  weaker  party  to  the  wage  bargain,  it  is  not  usually  inter- 
vening in  the  field  of  collective  bargaining.  The  situation  is  different 
in  matters  of  wages,  hours  of  labor,  and  shop  rules  which  govern  the 
manner  of  work,  dismissals,  promotions,  and  so  on.  Where  unions 
show  themselves  strong  enough  to  protect  individuals  in  these  matters 
the  function  of  government  should,  as  far  as  possible,  be  limited  to 
voluntary  mediation. 

It  doubtless  has  appealed  to  some  people  who  consider  the  em- 
ployer's position  more  powerful  than  that  of  the  union,  that  the 
employer  should  be  compelled  in  some  way  to  deal  with  unions,  or  at 
least  to  confer  with  their  representatives.  But,  if  the  State  recog- 
nizes any  particular  union  by  requiring  the  employer  to  recognize  it, 
the  State  must  necessarily  guarantee  the  union  to  the  extent  that  it 
must  strip  it  of  any  abuses  that  it  may  practice.  The  State  might 
be  compelled  to  regulate  its  initiation  fees  and  dues,  its  apprentice- 
ship ratio,  its  violation  of  agreements,  and  all  of  the  other  abuses  on 
account  of  which  the  employer  refuses  to  deal  with  it.  This  is  exactly 
what  is  done  through  compulsory  arbitration,  and  there  is  no  place 
where  the  State  can  stop  if  it  brings  compulsion  to  bear  on  the  em- 
ployers without  also  regulating  by  compulsion  the  unions.  If  so, 
the  whole  question  is  transferred  to  politics,  and  the  unions  which 
attempt  to  use  a  friendly  party  to  regulate  the  employer  may  find  a 
hostile  party  regulating  them.  We  believe  that  collective  bargaining 
and  joint  agreements  are  preferable  to  individual  bargaining,  and 
we  believe  that  the  general  public  should  support  the  unions  in  their 
efforts  to  secure  collective  agreements.  But  this  can  only  be  done 
through  the  influence  of  public  opinion  without  the  force  of  law. 
It  is  based  on  the  conclusion  that  twro  opposing  organizations,  equally 
strong,  are  able  to  drive  out  abuses  practiced  by  the  other.  This  is 


REPORT  OF   COMMISSION    ON   INDUSTRIAL   RELATIONS.  213 

very  different  from  recommending  that  the  Government  should  step 
in  and  drive  out  the  abuses. 

This  conclusion  and  recommendation  in  favor  of  voluntary  media- 
tion is  based  also,  in  part,  as  already  stated,  on  the  distinction 
between  collective  bargaining  and  the  individual  labor  contract. 
While  Government  for  the  past  80  years  has  been  wisely  interfering 
more  and  more  with  the  individual  labor  contract,  through  child 
labor  laws,  wage  payment  laws,  mechanics'  liens,  workmen's  compen- 
sation, and  so  on,  for  the  benefit  of  the  weaker  party,  yet  in  matters 
of  governmental  interference  with  collective  bargaining,  we  have  to 
deal  with  great  organized,  hostile  interests  that  are  capable  of  using 
their  power  in  the  politics  of  the  country,  in  the  administration  of 
labor  laws,  and  even  in  the  courts  of  justice.  Any  interference  with 
their  collective  bargaining  power  forces  them  to  get  control,  if  possi- 
ble, of  the  political  parties  or  the  executive  and  administrative 
officials,  or  the  courts,  that  interfere.  The  result  is  more  far-reaching 
and  destructive  than  the  mere  decision  one  wTay  or  another  in  a 
particular  dispute.  It  tends  to  corrupt  or  to  discredit  or  to  make 
inefficient  the  Government  itself.  This  country  is  so  large,  with  such 
extremes  of  sectional  interests,  with  industrial  and  class  interests, 
with  nationality  and  race  interests,  and  with  such  extremes  of  wages 
and  costs  of  living,  that  it  is  an  easy  matter  for  these  powerful  organ- 
ized interests  to  make  alliances  with  others  for  the  appointment  or 
control  of  officials.  When  this  is  done,  neither  side  can  have  confi- 
dence in  the  mediators  or  arbitrators  who  are  chosen  without  their 
consent.  A  system,  even  though  compulsory  only  in  part,  is  likely  to 
break  down  after  a  few  decisions  which  are  resented  by  either  side. 
The  department  or  commission  responsible  for  the  decision  loses 
confidence  and  therefore  usefulness.  For  this  reason  the  weakest  part 
of  our  recommendation  is  that  the  mediator  shall  appoint  the  third 
party  to  a  voluntary  board  of  arbitration  or  a  voluntay  board  of 
investigation  in  case  the  two  parties  can  not  agree.  It  seems  neces- 
sary that  some  authority  be  given  that  power.  But  the  mediator  is 
likely  to  lose  the  confidence  of  the  side  that  loses  in  an  arbitration, 
since  he  will  be  held  responsible  for  the  arbitrator  whom  he  ap- 
pointed. This  might  incapacitate  him  for  future  mediation.  But  we 
can  think  of  no  other  agency  that  would  be  acceptable  to  both  sides. 
If  the  ma}7or,  or  the  governor  or  the  President  appoints  the  third 
man,  employers  would  object.  If  the  courts  were  to  appoint  him  the 
unions  would  object.  We  are  forced  to  recommend  that  this  authority 
be  given  to  the  mediator,  but  we  propose  that  he  should  not  be  tied 
down  to  any  procedure  that  would  prevent  him  from  devising  any 
system  that  his  ingenuity  might  suggest  rather  than  fall  back  on  his 
precarious  power  of  appointing  the  odd  man. 

After  considering  all  forms  of  governmental  compulsion  in  col- 
lective disputes  and  even  admitting  their  partial  success  in  other 
countries,  wre  conclude  that,  on  the  whole,  in  this  country  as  much  can 
be  accomplished  in  the  long  run  by  strictly  voluntary  methods  as  by 
compulsory  methods  of  avoiding  strikes  and  lockouts.  It  can  not  be 
expected  that  strikes  and  lockouts  can  be  abolished  altogether.  Even 
countries  with  compulsory  systems  have  not  succeeded  in  preventing 
all  of  them.  In  our  country,  the  voluntary  method  in  collective  bar- 
gaining avoids  the  much  more  serious  evil  of  discrediting  the  agencies 
of  Government  which  must  be  looked  to  for  impartial  enforcement  of 


214  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

laws  affecting  the  individual  labor  contract.  It  is  to  the  enactment 
and  enforcement  of  laws  protecting  laborers  as  individuals  that  we 
must  look  for  the  removal  of  underlying  causes  of  industrial  unrest 
and  for  the  eventual  reduction  of  strikes  that  now  spring  from  the 
cumulative  abuses  that  individuals  suffer  without  other  effective 
remedies.  But  the  removal  of  these  abuses  can  not  be  accomplished 
without  the  efficient  and  nonpartisan  administration  of  laws,  and  this 
is  the  main  purport  of  our  recommendation  for  industrial  commis- 
sions to  regulate  the  individual  labor  contract. 

TRADE  DISPUTES. 

15.  Congress  and  the  State  legislatures  to  enact  laws  similar  to  the 
British  trades  disputes  act  of  1906,  relieving  employers'  associations 
and  labor  unions,  as  well  as  their  members,  officers,  or  agents,  when 
acting  in  their  behalf,  of  criminal  suits,  damage  suits,  and  injunctions 
on  account  solely  of  combination  or  conspiracy  connected  with  a  labor 
dispute,  when  the  act  would  be  lawful  if  clone  by  one  person.  Such 
laws  would  permit  the  use  by  either  side  without  legal  penalty  of 
its  weapons  of  closed  union  shop  and  closed  nonunion  shop,  of  strike 
and  lockout,  boycott  and  blacklist,  peaceful  picketing  and  strike- 
breaking, peaceful  inducement  to  break  a  contract  to  work  or  to  break 
off  allegiance  with  a  union,  in  pursuance  of  an  effort  to  win  a  labor 
dispute.  The  law  would  not  prevent  prosecutions  for  conspiracy 
where  the  act  if  done  by  one  person  would  be  a  crime.  We  copy 
below  sections  of  the  British  trades  disputes  act  as  indicating  the 
kind  of  legislation  which  with  modifications  to  suit  American  laws 
would  probably  reach  these  objects: 

Conspiracy. — An  agreement  or  combination  by  two  or  more  persons  to  do  or 
procure  to  be  done  any  act  in  contemplation  or  furtherance  of  a  trade  dispute 
between  employers  and  workmen  shall  not  be  indictable  as  a  conspiracy  if  such 
an  act  committed  by  one  person  would  not  be  punishable  as  a  crime.  *  * 
An  act  done  in  pursuance  of  an  agreement  or  combination  by  two  or  more  per- 
sons shall,  if  done  in  contemplation  or  furtherance  of  a  trade  dispute,  not  be 
actionable  unless  the  act,  if  done  without  any  such  agreement  or  combination, 
would  be  actionable. 

Damages. — An  action  against  a  trade-union,  whether  of  workmen  or  masters, 
or  against  any  members  or  officials  thereof  on  behalf  of  themselves  and  all  other 
members  of  the  trade-union,  in  respect  of  any  tortious  act  alleged  to  have  been 
nmii'.iitUMl  by  or  on  behalf  of  the  trade-union,  shall  not  be  entertained  by  any 
court. 

lir<nt-ii  of  contract  and  interference  with  business. — An  act  done  by  a  person 
in  contemplation  or  furtherance  of  a  trade  dispute  shall  not  be  actionable  on  the 
ground  only  that  it  induces  some  other  person  to  break  a  contract  of  employ- 
ment, or  that  it  is  an  interference  with  the  trade,  business,  or  employment  of 
some  other  person  or  with  the  right  of  some  other  person  to  dispose  of  his 
capital  or  his  labor  as  he  wills. 

Picketing  and  sabotage. — It  shall  be  lawful  for  one  or  more  persons,  acting 
either  on  their  own  behalf  or  on  behalf  of  a  trade-union  or  of  an  individual 
employer  or  firm  in  contemplation  or  furtherance  of  a  trade  dispute,  to  attend 
at  or  near  a  house  or  place  where  a  person  resides  or  works  or  carries  on  busi- 
noss  or  happens  to  be,  if  they  so  attend  merely  for  the  purpose  of  peacefully 
obtaining  or  communicating  information  or  of  peacefully  persuading  any  person 
to  work  or  nlistain  from  working. 

Every  person  who,  with  a  view  to  compel  any  other  person  to  abstain  from 
doing  or  to  do  any  act  which  such  other  person  has  a  legal  right  to  do  or  abstain 
from  doing,  wrongfully  and  without  legal  authority — 

1.  Uses  violence  to  or  intimidates  such  other  person  or  his  wife  or  children 
or  injures  his  property  ;  or, 

2.  Persistently  follows  such  other  person  about  from  place  to  place ;  or, 


REPORT  OF   COMMISSION   OX   INDUSTRIAL  RELATIONS.  215 

3.  Hides  any  tools,  clothes,  or  other  property  owned  or  used  by  the  other  per- 
son or  deprives  him  of  or  hinders  him  in  the  use  thereof ;  or, 

4.  Watches  or  besets  the  house  or  other  place  where  such  person  resides,  or 
works,  or  carries  on  business,  or  happens  to  be,  or  the  approach  to  such  house 
or  place;  or, 

5.  Follows  such  other  person  with  two  or  more  other  persons  in  a  disorderly 
manner  in  or  through  any  street  or  road, 

shall,  on  conviction  thereof  by  a  court  of  summary  jurisdiction,  or  an  indict- 
ment as  hereinafter  mentioned,  be  liable  either  to  pay  a  penalty  not  exceeding 
£20,  or  to  be  imprisoned  for  a  term  not  exceeding  three  months,  with  or  with- 
out hard  labor. 

It  is  apparent  from  all  the  preceding  recommendations  that  the 
creation  of  industrial  commissions  with  advisory  councils,  depends 
for  its  success  on  the  permanency  of  organizations  of  employers  and 
organizations  of  laborers.  It  is  only  as  we  have  organizations  that 
we  can  have  real  representation.  The  preceding  recommendations 
are  designed,  through  salaried  positions  for  civil  service  appointees 
and  unsalaried  positions  for  the  representatives  of  organizations, 
to  keep  the  latter  continuously  responsible  to  the  organizations  that 
elect  and  recall  them.  For  this  reason  any  policy  of  Government 
that  tends  to  destroy  the  organizations  or  to  compel  them  to  hide 
their  operations  in  secrecy  tends  to  weaken  the  basis  upon  which  im- 
provement in  the  enactment  and  administration  of  labor  law  must 
be  based.  Such  a  policy  is  that  which  permits  employers  to  collect 
damages,  and  in  a  lesser  degree  to  secure  injunctions  against  unions 
without  at  the  same  time  effectually  permitting  unions  to  bring 
similar  proceedings  against  employers'  associations.  The  decision 
in  the  case  of  the  hatters'  union  (208  U.  S.,  274)  awarding  heavy 
damages  for  boycotting  against  practically  all  members  of  the  local 
union,  will  make  it  possible  to  collect  damages  in  all  cases  where  an 
unlawful  conspiracy  is  shown.  Since  damages  arise  from  all  strikes 
and  boycotts,  there  is  no  conceivable  limit  to  which  suits  for  dam- 
ages can  be  brought.  The  result  must  be  the  weakening  or  destruc- 
tion of  unions  or  driving  them  into  secrecy  and  a  more  generally 
avowed  policy  of  violence. 

This  policy  also  brings  the  courts  into  the  field  of  collective  bar- 
gaining, and  necessarily  leads,  sooner  or  later,  to  the  efforts  of  both 
sides  to  control  the  judicial  as  well  as  the  administrative  and  legis- 
lative branches  of  Government.  Just  as  our  earlier  recommenda- 
tions were  intended,  in  part,  to  take  the  administration  of  labor  law 
out  of  the  hands  of  either  side  and  to  make  it  a  joint  affair,  so  this 
recommendation  is  intended,  in  part,  to  relieve  the  courts  of  similar 
partisanship  in  matters  of  collective  bargaining.  It  is  believed  that 
strong  organizations  of  employers  and  employees  are  much  more 
capable  than  the  courts  of  holding  each  other  in  check  and  prevent- 
ing abuses  on  either  side.  The  recommendation  is  intended  to 
recognize  the  collective  weapons  of  both  sides  as  the  means  of  secur- 
ing this  result,  and  yet,  through  the  Industrial  Commission  and  its 
advisory  council,  including  mediators  and  the  efficient  enforcement 
of  labor  laws,  to  minimize  the  necessity  of  resorting  to  these  weapons. 

The  so-called  Clayton  Act  of  1913  was  supposed  by  some  lawyers 
to  accomplish  the  result  intended  in  the  foregoing  recommendation, 
but  other  lawyers  contend  that  the  law  of  conspiracy  has  not  been 
changed  by  the  act.  At  any  rate,  the  law  does  not  apply  to  the 
States,  only  one  of  which,  California,  has  adopted  a  similar  law,  and 


216  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

another,  Massachusetts,  has  withheld  adoption  owing  to  an  unfavor- 
able reply  by  the  Supreme  Court  on  the  question  propounded  by  the 
legislature.  It  is  admitted  that  the  British  act  accomplishes  the 
intended  purpose,  and  consequently  we  take  it  as  the  model  in  case 
these  other  acts  are  found,  under  court  decisions,  not  to  do  so. 

The  recommendation  is,  as  already  said,  intended  to  prevent  the 
courts  from  interfering  with  the  collective  weapons,  provided  they 
are  peaceful,  that  either  side  uses  to  defeat  the  other  side.  It  is  rec- 
ognized, of  course,  that  these  weapons  are  coercive  and  are  intended 
to  be  coercive,  but  they  are  not  coercive  in  the  sense  of  physical 
violence.  They  are  coercive  only  in  the  sense  that  numbers  of  people 
acting  together  to  do  an  act  lawful  for  each  separately  have  more 
power  over  individuals  than  a  single  individual  acting  by  himself 
would  ordinarily  have.  But  even  an  individual  acting  alone  may 
have  the  same  kind  of  coercive  power,  which  in  his  case  would  be 
lawful,  as,  for  example,  when  an  employer  compels  a  union  man  to 
give  up  his  membership  in  a  union  by  threatening  to  discharge  him 
if  he  does  not.  This  kind  of  individual  coercion  is  held  to  be  entirely 
lawful,  and  any  State  or  Federal  statute  which  prevents  the  em- 
ployer from  using  such  coercion  is  unconstitutional.  This  is  so  even 
if  the  employer  is  a  corporation  with  thousands  of  stockholders  and 
bondholders,  for  the  corporation  is  held  to  be,  for  that  purpose,  not 
a  conspiracy,  but  a  single  person.  By  declaring  laws  unconstitu- 
tional which  attempt  to  deprive  the  employer  or  corporation  of  the 
right  to  discharge  a  man  on  account  of  his  unionism,  the  court  steps 
in  to  prohibit  the  State  from  depriving  the  employer  of  a  coercive 
weapon  used  to  defeat  the  union.  It  prohibits  a  State  from  depriv- 
ing an  employer  of  the  closed  nonunion  shop  as  a  coercive  weapon 
against  unions. 

A  counterweapon  which  the  union  has  is  the  closed  union  shop. 
If  the  employer  discharges  or  threatens  to  discharge  one  of  his 
employees  on  account  of  his  membership  in  a  union,  the  only  effective 
weapon  that  the  employee  may  have,  in  order  to  retain  his  member- 
ship, may  be  a  strike  or  the  threat  of  a  strike  by  his  union  to  compel 
the  employer  to  discharge  all  nonunion  men.  In  some  States  a  strike 
for  such  a  purpose,  under  the  decisions  of  the  courts,  is  unlawful, 
on  the  ground  that  it  is  a  conspiracy  to  compel  the  employer  to  give 
up  his  right  to  employ  whom  he  pleases,  or  a  conspiracy  to  deprive 
the  nonunion  man  of  his  right  to  work  for  whom  he  pleases.  The 
foregoing  recommendation  is  intended  to  make  it  plain  that  no 
employer  or  union  of  employers  shall  be  prevented  by  law  or  by  a 
court  from  running  a  closed  nonunion  shop  if  he  can,  and  no  union 
shall  be  prevented  from  compelling  him  to  run  a  closed  union  shop 
if  it  can,  so  long  as  the  method  would  be  lawful  for  a  person  not 
backed  by  a  union. 

In  a  similar  way  it  is  lawful  for  an  employer  to  furnish  other 
employers,  whether  members  of  his  association  or  not,  with  informa- 
tion as  to  whether  an  employee  is  a  member  of  a  union  or  a  union 
agitator,  and  to  file  such  information  in  the  employment  bureau  of 
an  employers'  association.  If  the  workman  can  not  prevent  his  em- 
ployer by  law  from  discharging  him  on  account  of  unionism,  much 
less  can  he  require  another  employer  to  hire  him.  It  is  lawful  also 
for  an  employers'  association  to  expel  a  member  who  refuses  to  com- 
ply with  a  nonunion  rule,  and,  except  in  case  of  a  public  utility,  to 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  217 

refuse  to  deal  with  him  or  to  discriminate  against  him.  Further-' 
more,  since  other  employers'  rights  of  furnishing  information  to 
fellow  employers  are  so  great,  it  is  practically  impossible  to  get  proof 
that  they  contain  the  malicious  purpose  which  constitutes  a  blacklist, 
and  statutes  preventing  employers  from  using  some  of  these  legal 
rights  have  been  held  unconstitutional.  But,  as  a  rule,  the  employers' 
blacklist  does  not  need  to  go  to  these  extreme  measures  permitted  by 
law,  because  it  is  effective  short  of  these  measures. 

The  case  is  different  with  the  union's  weapon,  the  boycott.  To 
carry  out  a  boycott  the  union  must  circulate  "  unfair  lists  "  and  must 
induce  as  many  persons  as  possible  to  withdraw  their  patronage. 
The  courts  distinguish  between  the  primary  boycott  and  the  sec- 
ondary boycott.  The  former  is  perhaps  legal  in  some  cases,  just  as 
a  strike  is  legal,  for  it  is  merely  the  refusal  to  patronize  an  em- 
ployer on  the  part  of  the  same  persons,  or  their  fellow  unionists, 
who  have  struck  against  the  employer,  or  who  are  locked  out  or 
blacklisted  by  him  or  his  association.  It  is  doubtful,  though, 
whether  this  primary  boycott  is  legal  if  it  extends  to  members  of 
unions  other  than  the  one  directly  injured.  The  American  Federa- 
tion of  Labor,  for  example,  can  not  carry  out  a  primary  boycott  on 
goods  which  the  hatters'  union  has  boycotted,  since  it  is  prohibited 
from  publishing  the  information.  And  even  the  strike  and  the 
primary  boycott  are  sometimes  unlawful  if  the  court  holds  that  the 
purpose  or  the  means  are  unlawful.  The  courts  will  not  directly 
enjoin  either  a  strike  or  a  primary  boycott.  They  can  not  compel  a 
man  to  work  or  to  purchase.  But  they  can  make  the  unlawful  strike 
or  primary  boycott  ineffective  by  enjoining  even  peaceful  picketing 
or  persuasion,  or  the  circulation  of  "  unfair  lists  "  designed  to  notify 
others  that  the  boycott  is  on. 

But  the  secondary  boycott  is  generally  held  illegal  because  it  is 
an  additional  boycott  placed  upon  a  third  party,  usually  a  merchant, 
who  continues  to  sell  the  goods  of  the  boycotted  employer.  As  to 
this  third  party  the  boycott  is  primary,  and  he  can  secure  an  injunc- 
tion or  damages  on  the  ground  of  conspiracy  to  injure  him  without 
just  cause,  or  to  compel  him  to  break  a  contract,  if  he  considers  the 
damage  to  himself  worth  while.  But  boycott  suits  are  not  often 
brought  by  third  parties,  either  because  the  damage  to  them  is 
usually  slight,  since  they  only  need  to  patronize  other  manufac- 
turers whose  goods  the  boycotters  are  willing  to  buy,  or  because  the 
courts  protect  them  through  suits  brought  by  the  party  originally 
boycotted.  The  employer  originally  boycotted  would  not  secure 
protection  if  he  depended  on  a  hundred  or  a  thousand  boycotted 
merchants  not  seriously  concerned  to  bring  separate  suits.  Con- 
sequently the  vast  majority  of  boycott  cases  are  brought  by  the  per- 
son primarily  boycotted,  in  order  to  prevent  the  spread  of  boycotts  to 
other  persons  who  deal  with  him;  in  other  words,  to  prevent  a  sec- 
ondary boycott  against  himself.  The  boycotted  employer  hides  be- 
hind the  alleged  injury  done  to  third  parties  in  order  to  get  damages, 
not  for  them,  but  for  himself,  as  in  the  case  of  the  Loewe  Co.  against 
the  hatters'  union.  The  ground  of  action  is  not  injury  to  third  par- 
ties, but  interference  with  the  employers'  right  to  have  free  and 
uninterrupted  business  dealings  with  all  who  wish  to  deal  with  him. 
This  does  not  seem  to  be  equal  treatment  of  the  employers'  blacklist 
which  interferes  with  the  unionists'  right  to  have  uninterrupted 


218  REPORT  OF  COMMISSION   0!ST  INDUSTRIAL  RELATIONS. 

access  to  all  employers,  and  the  employees'  boycott  which  interferes 
with  the  employers'  right  of  access  to  the  commodity  market. 

The  arguments  now  used  to  declare  the  secondary  boycott  illegal 
are  those  formerly  used  to  declare  the  strike  and  the  primary  boycott 
illegal.  Our  recommendation  simply  carries  forward  another  step 
the  effort  to  secure  equality  between  organized  capital  and  organized 
labor. 

Of  the  other  weapons,  the  strike  and  lockout,  the  employers'  asso- 
ciation does  not  usually  employ  its  weapon,  because  it  can  force  the 
union  to  strike  or  yield,  but  the  strike  is  illegal  if  the  purpose  is 
illegal,  such  as  the  purpose  in  some  States  of  securing  a  closed  union 
shop.  The  recommendation  is  intended  to  remove  all  illegality  from 
the  strike. 

This  recommendation  is  intended  to  do  away  with  the  doctrine  of 
conspiracy  for  both  employers'  associations  and  labor  unions,  except 
in  so  far  as  the  conspiracy  is  one  to  commit  what  would  be  a  crime 
for  one  person,  and  to  do  away  with  all  suits  for  damages,  including 
injunctions  to  prevent  damage,  against  a  union  or  against  its  mem- 
bers when  acting  for  the  union,  except  suits  for  damages  against 
conspirators  to  commit  a  crime. 

The  doctrine  of  conspiracy  is  based  on  the  undoubted  fact  that, 
while  a  lawful  act  done  by  only  one  person  may  be  coercive  and  cause 
damage,  or  be  intended  to  cause  damage,  yet  the  coercion  and  damage 
are  ordinarily  so  small,  compared  with  the  social  advantage  of  liberty 
to  do  as  one  pleases,  that,  except  in  breach  of  contract,  the  court  does 
not  entertain  a  suit  at  law  for  damages  or  for  prevention  of  the  coer- 
cion that  causes  damages.  Yet  the  same  lawful  act,  if  done  by  agree- 
ment between  two  or  more  persons,  may  reach  a  point  of  coercion 
where  the  damage,  compared  with  the  social  advantage  of  liberty  to 
combine  with  others,  is  so  serious  that  the  agreement  becomes  un- 
lawful. Therefore,  those  who  enter  into  an  agreement  to  do  an  act 
which  would  be  lawful  without  the  agreement,  or  their  agents,  may 
be  prosecuted  for  damages  or  may  be  prevented  by  injunction  from 
using  the  coercive  power  of  numbers  to  cause  the  damage.  It  is  this 
doctrine  of  conspiracy,  or  coercion  through  mere  numbers,  that  is 
sought  to  be  removed  by  the  recommendation.  Individuals  and  the 
individual  members  of  unions  who  conspire  with  them  would  con- 
tinue to  be  arrested,  prosecuted,  and  punished  as  individuals  or  con- 
spirators for  all  acts  which  are  criminal  for  them  as  individuals,  but 
no  suit  for  damages  could  be  brought  against  the  union  for  acts 
committed  by  or  on  behalf  of  the  union. 

In  other  words,  the  recommendation  removes  completely  the  doc- 
trine of  civil  conspiracy  according  to  which  damages  may  be  col- 
lected or  injunctions  issued.  It,  however,  retains  the  doctrine  that 
all  conspirators  who  join  in  procuring  an  act  that  is  criminal  for 
one  person  to  do  are  likewise  guilty  with  the  person  who  does  it. 
This  might  include  all  the  members  of  a  union  if  all  were  proven 
actuary  to  have  joined  in  such  a  conspiracy.  Those  who  conspired 
could  still  be  prosecuted  and  sent  to  prison,  as  was  done  in  the  case 
of  the  officers  and  members  of  the  structural  iron  workers  for  trans- 
porting dynamite.  The  recommendation  is  not  intended  to  change 
the  law  in  this  respect.  It  would  change  the  law  in  the  hatters'  case. 

Employers  are  already  learning  the  ineffectiveness  of  the  injunc- 
tion and  the  danger  to  themselves  of  throwing  on  the  courts  the 


burden 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  219 


burden  of  protection  which  they  can  as  readily  secure  through  their 
own  organizations.  With  their  advantages  of  position,  both  as 
owners  of  the  means  of  livelihood  and  the  possessors  of  the  power  of 
discharge  and  of  blacklist  of  union  members  which  goes  with  the 
ownership  of  property,  they  have  a  superior  power  over  unions. 
Our  recommendations  do  not  grant  employers'  associations  rights 
additional  to  those  which  they  now  enjoy  in  fact;  they  merely  grant 
the  unions  corresponding  rights. 

The  British  act  also  defines  the  kind  of  picketing  that  is  criminal 
in  that  it  is  not  peaceful,  and  thereby  defines  what  is  peaceful  picket- 
ing. In  these  cases  of  illegal  or  criminal  picketing  and  in  the  de- 
struction or  damage  to  physical  property  those  who  have  done  the 
criminal  acts  and  those  who  have  conspired  to  have  them  done  may 
be  fined  and  imprisoned,  but  the  union  funds  or  the  property  of  its 
members  not  proven  to  have  joined  in  the  criminal  conspiracy  could 
not  be  taken  for  damages. 

Without  entering  into  further  details,  the  object  of  the  recom- 
mendation is  to  place  unions  and  employers'  associations  upon  an 
equal  basis  in  the  use  of  their  competitive  weapons. 

Regarding  the  constitutionality  of  this  recommendation  it  should 
be  noted  that  it  takes  both  employers'  associations  and  unions  from 
under  the  operation  of  the  antitrust  laws.  This  differs  from  the 
Clayton  and  other  acts  which  take  only  unions  from  under  the  anti- 
trust laws  or  common  law  and  might  be  good  ground  for  declaring 
these  laws  unconstitutional.  The  British  act  does  this  by  distinguish- 
ing between  employers  as  merchants  or  associations  of  manufac- 
turers, who  sell  commodities  to  the  public,  and  whose  bargain  may  j 
be  called  the  "  price  bargain,"  and  the  same  employers  in  the  differ- 
ent function  of  dealing  with  labor,  and  whose  bargain  is  the  "wage 
bargain."  The  employers,  in  their  function  of  merchants  and  manu- 
facturers, or  sellers  of  products  or  commodities  to  consumers  or  the 
Sublic,  continue  to  come  under  the  antitrust  laws,  and  the  Interstate 
ommerce  Commission,  the  Federal  Trade  Commission,  and  the  State 
public  utility  commissions  have  been  created  for  the  purpose  of  pro- 
tecting the  public  against  them  as  such.  These  commissions  regulate 
price  bargains  for  commodities  or  products,  between  corporations 
and  consumers. 

But  it  does  not  follow  that  even  the  same  employers  when  organ- 
ized to  regulate  the  wage  bargain  with  employees  should  be  treated 
as  a  conspiracy  or  trust.  They  perform  a  very  different  function 
and  public  policy  is  very  different.  In  the  case  of  the  price  bargain 
the  public  is  interested  in  securing  low  prices,  but  in  the  case  of 
wage  bargain  it  is  interested  in  permitting  high  wages.  Yet  the 
public  needs  protection  against  abuses  of  labor  unions  as  it  does 
against  the  abuses  of  trusts.  The  employers'  association  stands  be- 
tween organized  labor  and  the  public  just  as  the  railroad  and  public 
utility  commissions  and  the  trade  commission  stand  between  mer- 
chants' or  manufacturers'  associations  and  the  unorganized  public. 
But  the  employers'  associations  are  a  better  protection  to  the  public 
against  the  abuses  of  unions  than  are  the  courts.  Labor  leaders  who 
wish  to  keep  discipline  in  tTieir  unions  and  the  observance  of  joint 
agreements  realize  that  they  can  not  do  so  unless  confronted  by  a 
strong  employers'  association.  They  realize  that  continued  abuses 
lead  eventually  to  the  destruction  of  their  unions.  An  employer  who 


220  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

stays  out  of  his  organization  is  as  culpable  as  a  laborer  who  stays  out 
of  "his  union.  Employers  should  organize  100  per  cent  just  as  the 
unions  endeavor  to  reach  that  mark. 

It  would,  therefore,  seem  to  be  proper  and  constitutional  classifi- 
cation in  the  interest  of  public  policy  to  treat  manufacturers  under 
a  law  prohibiting  or  regulating  trusts  and  public  utilities  and  to 
treat  the  same  persons  as  employers  under  different  laws,  like  those 
of  mediation  and  trade  disputes,  where  both  employers'  associations 
and  trade-unions  are  given  immunities  for  the  use  of  peaceful  coercive 
weapons  which  they  do  not  possess  under  the  antitrust  laws. 


FOUNDATIONS. 


16.  Considerable  attention  has  been  given  by  this  commission  to 
the  largest  foundations  or  endowments  now  in  the  hands  of  private 
trustees.  Any  proposed  legislation  on  this  subject  should  be  pre- 
ceded by  a  complete  investigation  of  all  foundations  and  endow- 
ments, else  the  law  would  have  effects  not  contemplated  by  the  legis- 
lature or  Congress.  Such  an  investigation  would  include  all  en- 
dowed charities,  endowments  of  religious  organizations  and  uni- 
versities and  colleges.  We  are  informed  that  such  investigations  have 
been  made  in  England  and  France,  resulting  in  legislation.  The  in- 
vestigation should  be  complete,  covering  all  aspects  of  the  question 
and  bringing  out  both  the  advantages  and  the  disadvantages  of  such 
foundations  and  endowments.  The  legislature  could  then  act  intelli- 
gently on  the  subject. 

We  are  convinced  that  many  of  these  endowments  in  private  hands 
have  a  beneficial  effect  on  the  work  of  State  and  governmental  insti- 
tutions. Large  private  universities  have  set  the  example  and  stimu- 
lated the  States  to  support  and  enlarge  their  State  universities. 
Some  of  the  investigations  and  reforms  started  by  recent  large  foun- 
dations have  already  induced  Congress  and  administrative  depart- 
ments to  enter  the  same  field  and  to  extend  it.  In  fact,  almost  every- 
thing that  Government  now  does  was  done  at  first  through  private 
initiative,  and  it  would  be  a  misfortune  if  private  endowments,  unless 
plainly  shown  to  have  committed  abuses,  should  be  prohibited.  Even 
their  abuses  can  be  rectified  by  the  legislature  through  its  control 
over  charters,  if  reasonable  ground  can  be  shown.  But  it  is  better, 
for  the  most  part,  that  they  should  go  on  at  their  own  initiative  in 
order  that  the  people  through  their  Government  may  see  the  value 
of  their  work  and  then  take  it  up  and  extend  it  more  widely  than 
the  private  foundations  are  able  to  do.  It  is  largely  for  this  reason 
that  we  recommend  a  "Federal  fund  for  social  welfare"  (par.  18), 
in  order  that  the  Nation  may  compete  with  or  displace  private 
foundations  in  this  vital  matter. 

However,  experience  has  abundantly  shown  that  there  should  be 
no  alliance  between  these  private  foundations  or  endowments  and 
the  Government.  The  State  or  Government  should  neither  subsidize 
them  nor  be  subsidized  by  them,  nor  cooperate  with  them.  Such  co- 
operation has  often  led  to  public  scandal.  Instead  of  subsidizing 
private  charity  the  State  should  use  its  money  to  displace  it  by  better 
and  more  universal  charity.  Instead  of  calling  upon  private  founda- 
tions for  help,  the  Government  should  treat  them  as  competitors. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  221 

No  effort  on  the  part  of  Government  officials  to  secure  financial  as- 
sistance from  them  should  be  allowed. 

SUBSIDIES. 

17.  The    Federal    commission    to    have   charge    of    all    subsidies 
granted  to  the  States  for  the  promotion  of  industrial  education, 
safety,  employment  offices,  and  other  matters,  as  Congress  may  de- 
termine.   The  commission  to  meet  the  expenses  of  State  officials  when 
called  together  for  conferences  on  standards  and  uniformity.     Sub- 
sidies to  be  granted  on  condition  that  the  standards  are  maintained. 

The  Public  Health  Service  now  has  authority  to  call  conferences 
of  State  health  officials  and  to  meet  their  expenses.  The  same  power 
should  be  given  to  the  proposed  industrial  commission.  A  large  part 
of  the  work  of  the  commission  will  be  the  field  work  of  advising 
State  officials  as  to  the  best  methods  of  administration.  This  kind  of 
work  is  now  done  by  the  Department  of  Agriculture  and  the  Public 
Health  Service. 

Subsidies  are  recommended  in  certain  cases  because  the  State 
governments  are  not  in  position  to  secure  adequate  funds  and  as  an 
inducement  to  bring  their  standards  up  to  the  standards  formulated 
by  the  Federal  commission. 

(Funds  for  this  purpose  are  recommended  in  paragraph  18.) 

FEDERAL  FUND  FOR  SOCIAL  WELFARE. 

18.  A  Federal  inheritance  tax  on  all  estates  above  $25,000,  begin- 
ning at  1  per  cent  on  the  excess  above  $25,000  and  rising  to  15  per 
cent  on  the  excess  above  $1,000,000  for  the  class  of  direct  heirs,  such 
as  wife,  children,  and  parents.    Higher  rates  for  more  remote  rela- 
tives and  strangers.    The  Federal  inheritance  tax  to  be  a  supertax, 
added  upon  the  existing  rates  assessed  by  the  States.     Provision, 
however,  to  be  made  that  any  State  which  repeals  all  inheritance  tax 
laws,  or  refrains  from  enacting  them,  shall  receive  from  the  Federal 
Government,  say,  50  cents  per  capita  of  its  population  per  year.     The 
administration  "and  collection  of  this  tax  to  be  placed  in  charge  of 
present  assessors  and  collectors  of  income  taxes,  who  already  collect 
income  taxes  on  estates  in  the  hands  of  executors.    Kevenues  derived 
from  inheritance  taxes  to  be  placed  in  trust  with  the  Federal  Reserve 
Board  for  investment  in  securities  approved  by  Congress.    The  fund 
to  be  known  as  "  Federal  fund  for  social  welfare."    Expenditures  of 
income  derived  from  such  securities  to  be  made  under  the  direction 
of  the  Federal  industrial  commission  for  such  purposes  of  industrial 
and  social  welfare  as  Congress  may  authorize.     Should  the  income 
from  investments  not  be  adequate  to  meet  the  authorized  expendi- 
tures, further  investments  to  be  withheld  and  the  principal  to  be 
expended.    Revenues  derived  from  activities  of  the  commission,  such 
as  head  tax  on  immigrants,  etc.,  to  belong  to  the  fund.    Also  unex- 
pended balance  to  be  held  in  the  fund  for  disposition  by  Congress. 

A  similar  fund  collected  from  immigrants  in  excess  of  the  ex- 
penses of  the  service  is  held  with  accruals  for  disposition  by  Con- 
gress. 


222  REPORT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS. 

We  have  previously  shown  the  need  of  improved  administration 
in  providing  for  any  future  program  of  social  legislation.  We  have 
held  that  it  is  useless  to  undertake  any  additional  labor  legislation 
if  effective,  nonpartisan  machinery  of  administration  is  not  pro- 
vided, but  even  with  such  machinery  it  can  not  be  expected  that  the 
•expense  of  government  will  be  reduced.  In  fact,  the  expenses  will 
be  increased,  and  no  legislation  should  be  attempted  unless  the  possi- 
bilit}^  of  getting  these  revenues  is  fully  considered. 

Moreover,  these  revenues  must  be  continuous,  else  the  whole  pro- 
gram will  be  liable  to  sudden  breakdown  through  failure  of  funds. 
Hostility  to  labor  laws  is  just  as  effective  when  it  succeeds  in  killing 
appropriations,  on  the  ground  of  economy,  as  when  it  defeats  the 
law  itself. 

Already  the  increased  expense  of  administration  of  labor  laws  is 
bringing  active  and  effective  protest.  The  greatest  leap  in  this  ex- 
pense has  come  with  workmen's  compensation.  So  far  as  this  increase 
is  due  to  inefficiency  of  the  existing  political  and  partisan  methods 
of  administration  the  protest  is  valid.  The  remedy  consists  in  im- 
proving the  efficiency  and  eliminating  the  partisanship,  and  this  is 
the  purport  of  what  we  have  previously  said.  So  far,  also,  as  the 
increase  places  excessive  burdens  of  taxation  on  the  already  burden- 
some taxes  of  the  people,  the  protest  also  is  valid.  But  here  the 
remedy  consists  in  discovering  new  sources  of  revenue  that  will  not 
be  burdensome. 

A  Federal  inheritance  tax,  partly  distributed  to  the  States,  seems 
to  be  the  most  appropriate  method  of  securing  these  new  sources 
of  revenue.  The  principal  underlying  cause  of  social  unrest  is  the 
uncertainty  of  income  of  wage  earners  and  small  producers.  A 
steady,  continuous  income,  even  though  it  be  small  in  amount,  is  of 
more  importance  than  high  wages  or  earnings  at  certain  times  and 
no  earnings  at  other  times.  This  uncertainty  of  income  is  the  main 
cause  of  the  dependence,  inequality,  and  oppression  which  produce 
conflicts  between  capital  and  labor. 

The  great  majority  of  wage  earners  can  not  provide  in  advance 
for  future  contingencies  when  they  will  get  no  income.  These  con- 
tingencies come  from  accidents,  sickness,  invalidity,  old  age,  death, 
unemployment,  and  the  lack  of  industrial  education. 

There  are  two  main  reasons  for  this  inability  to  provide  for  con- 
tingencies: (1)  Inability  in  bargaining  for  wages  to  take  into  account 
future  contingencies  and  future  cost  of  living.  The  w^age  earner  may 
be  able  when  bargaining  to  get  enough  wages  for  current  cost  of  liv- 
ing, but  he  does  not  include  insurance  premiums  in  his  notion  of 
current  cost,  except  so-called  "  industrial  insurance  "  to  provide  for 
funeral  expense.  (2)  Lack  of  thrift  and  habits  of  saving,  owing  in 
part  to  their  own  fault  and  in  part  to  the  contingencies  which  eat 
up  their  savings  and  bring  discouragement.  In  either  case,  under 
competitive  industry,  the  condition  may  be  accepted  as  permanent. 

On  the  other  hand,  employers  and  investors  are  much  more  able  to 
provide  in  advance  for  a  future  continuous  income  against  contin- 
gencies. All  investments  are  made  with  reference  to  equalizing  the 
flow  of  income  over  a  future  period  of  time  in  the  form  of  interest  or 
dividends. 

Inheritances  are  the  principal  means  by  which  owners,  without 
effort  or  thrift  on  their  part,  secure  titles  to  wealth  and  its  future  con- 


tinu 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  223 


tinuous  income.  Consequently,  for  the  Government  to  take  a  part  of 
large  inheritances  which  provide  continuous  incomes  and  to  devote 
the  proceeds  to  the  purpose  of  making  incomes  more  nearly  continu- 
ous for  those  who  are  not  able,  under  existing  conditions,  to  do  it  for 
themselves  appeals  to  the  sense  of  justice.  It  may  be  accepted  in 
advance  that  men  of  wealth  will  approve  of  an  inheritance  tax  on  two 
conditions,  namely,  that  the  tax  will  be  devoted  to  a  great  public 
purpose,  and  that  the  funds  will  be  administered  economically  and 
efficiently  without  partisanship  or  practical  politics.  These  two  con- 
ditions are  essential  and  are  contemplated  in  our  recommendations 
for  a  Federal  industrial  commission  and  a  Federal  fund  for  social 
welfare. 

Some  of  the  purposes  for  which  this  fund  might  be  used,  in  order 
to  meet  the  object  of  social  welfare,  are,  in  addition  to  the  overhead 
expenses  of  the  commission,  the  safety  and  health  agencies  of  the 
Federal  Government  and,  perhaps,  subsidies  to  States  conforming  to 
standards ;  industrial  education  and  subsidies  to  States ;  Federal  em- 
plo3rment  offices  and  subsidies  to  States  which  adopt  an  approved 
plan  coordinating  with  the  Federal  plan;  Federal  supervision  of 
private  employment  offices  doing  interstate  business;  investigation 
and  statistics  of  labor  conditions;  mediation;  administration  of  im- 
migration laws ;  workmen's  compensation  and  subsidies  to  systems  of 
sickness,  unemployment,  and  other  forms  of  social  insurance  as  may 
be  approved  by  Congress.  Opportunities  for  investment  should  be 
considered,  such  as  workmen's  houses,  workmen's  hotels,  hospitals, 
rural-credit  associations,  and  similar  investments  made  by  Germany 
in  respect  of  its  various  insurance  funds. 

It  is  impossible  to  estimate  at  this  time  the  revenue  that  would  be 
derived  from  such  a  tax.  We  have  estimated  the  amounts  now  col- 
lected by  the  States  from  inheritance  taxes  at  $25,000,000,  as  against 
the  $50,000,000  that  they  would  receive  at  50  cents  per  capita,  The 
present  systems  in  vogue  in  32  States  yield  revenues  from  $1,096  in 
.Wyoming  to  $11,162,478  in  New  York.  The  amount  per  capita  of 
population  ranges  from  1  cent  per  capita  in  Texas  and  Wyoming  to 
59  cents  in  Connecticut,  66  cents  in  Illinois,  68  cents  in  Massachu- 
setts, and  $1.28  in  New  York.  The  latter  four  States  wrould  lose  if 
they  abolished  their  inheritance  tax  and  accepted  the  Federal  dis- 
tribution of  50  cents  per  capita.  Other  States  would  gain.  Yet  this 
can  not  be  considered  a  just  criticism  of  the  proposal,  for  the  States 
which  lose  are  those  in  which  wealthy  people  choose  to  reside  and 
yet  their  fortunes  arise  from  ownership  of  property  scattered 
throughout  the  country.  The  present  system  of  State  inheritance 
taxes  practically  permits  a  few  States  to  collect  taxes  on  property 
whose  value  is  created  by  many  of  the  States.  A  Federal  inheritance 
tax  is  the  only  method  by  which  the  entire  Nation,  which  contributes 
to  the  value  of  estates,  can  secure  revenues  from  the  values  which  it 
creates. 

The  recommendation  of  returning  50  cents  per  capita  to  the  States 
is  designed  to  induce  them  to  turn  over  to  the  Federal  Government 
the  sole  right  of  imposing  inheritance  taxes  and  yet  to  preserve  to 
the  States  at  least  a  part  of  such  preempted  claims  as  they  may  have 
acquired  by  getting  into  the  field  first. 

The  Federal  machinery  is  already  in  existence  for  collecting  in- 
come taxes,  and  the  same  officials,  without  any  appreciable  increase 


224  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

in  the  number,  can  assess  and  collect  inheritance  taxes.  Executors 
of  estates  whose  annual  incomes  amount  to  $2,500  or  more  per  year 
are  now  required  to  make  returns  to  collectors  of  internal  revenue, 
and  the  only  addition  required  for  an  inheritance  tax  is  that  executors 
of  estates  of  $25,000  should  make  returns  of  the  total  value  of  the 
estates.  This  can,  of  course,  be  done  at  the  same  time  when  they  fill 
cut  the  blanks  which  show  net  incomes.  Internal-revenue  officials 
also  investigate  all  cases  where  it  is  suspected  that  full  returns  of 
income  are  not  made.  No  additional  officials  are  therefore  required 
for  these  purposes.  The  only  addition  would  be  such  number  of 
officials  as  are  required  for  general  supervision.  The  machinery  is 
already  in  existence,  and  no  tax  can  be  so  cheaply  administered  as  a 
Federal  inheritance  tax. 

The  significant  feature  of  the  proposed  inheritance  tax  is  the 
high  rates  on  direct  heirs,  as  compared  with  the  very  low  rates  im- 
posed in  the  States.  The  estates  going  to  wife  and  lineal  heirs  in- 
clude probably  80  per  cent  to  90  per  cent  of  all  estates,  and  it  is 
therefore  from  such  estates  that  the  largest  revenues  are  expected. 
Such  estates  are  scarcely  touched  by  American  inheritance  tax  laws. 
The  sensationally  high  rates  imposed  in  some  States  on  estates  going 
to  strangers  and  remote  heirs  are  something  of  a  delusion,  for 
scarcely  5  per  cent  of  the  estates  go  to  such  beneficiaries.  The  rates 
on  estates  going  to  strangers  reach  their  highest  figure  at  35  per 
cent  in  California  on  the  excess  over  $1,000,000  and  fall  as  low  as  5 
per  cent  in  Pennsylvania  and  other  States.  But  the  rates  on  the  ex- 
cess over  $1,000,000  going  to  direct  heirs  is  only  10  per  cent  in  Cali- 
fornia and  falls  to  1,  2,  or  3  per  cent  in  most  of  the  States.  Our 
recommendation  affects  mainly  these  estates  going  to  direct  heirs, 
which  are  80  to  90  per  cent  of  all  estates,  and  the  highest  rate  on 
such  estates  is  15  per  cent  on  the  excess  over  $1,000,000.  This  con- 
forms more  nearly  to  the  inheritance  taxes  of  leading  European 
countries  which  would  yield  according  to  various  estimates  over 
$200,000,000  if  adopted  by  the  Federal  Government  of  this  country. 

The  following  administrative  reasons  for  making  the  inheritance 
tax  a  Federal  tax  are  submitted  by  Prof.  T.  S.  Adams,  of  the  Wis- 
consin tax  commission,  who  also  suggests  the  repayment  to  States 
as  a  method  of  inducing  them  to  yield  to  the  Federal  tax.  He  says : 

1.  The  present  system  gives  rise  to  a  large  amount  of  double  or  multiple 
taxation  and  if  the  existing  laws  were  enforced,  the  situation  would  be  un- 
bearable.   Most  State  laws  tax  the  transfer  of  all  securities  owned  by  resident 
decedents  and  yet  attempt  to  tax  the  transfer  of  some  securities  owned  by  non- 
resident decedents   when    they   represent   property   in   the    State   passing   the 
law.     I  have  known  one  block  of  railroad  stock  to  be  assessed   in  Wiscon- 
sin  (residence  of  decedent),  in  Illinois   (where  the  stock  was  deposited  in  a 
trust  company),  and  in  Utah,  where  the  railroad  was  incorporated,  and  it  is 
not  unlikely  that  other  States  through  which  the  railroad  passed  imposed  a 
tax  before  the  estate  was  finally  settled.     Four  different  and  conflicting  taxes 
are  thus  in  use  at  the  present  time. 

2.  At  present  administration  of  such  laws  is  costly,  ineffective,  unjust,  and 
capricious.     Wisconsin  attempts  to  tax  the  transfer  of  all  securities  represent- 
ing,   however    indirectly,    property    in    Wisconsin.      It    is    impossible    where 
holding  companies  hold  the  stock  in  the  companies  immediately  owning  the 
AVisconsin  property.     To  enforce  it,  particularly  where  bonds  are  concerned, 
agents  must  be  employed  outside  the  State.     We  keep  two — in  New  York  and 
Chicago.    We  should  have  an  agent  in  every  place  in  the  country  where  estates 
are  probated.    To  enforce  the  Wisconsin  interpretation  would  cost  an  enormous 
sum. 


REPORT  OF   COMMISSION   ON  INDUSTKIAL   RELATIONS.  225 

3.  Yet  the  Western  States  are  insisting  on  the  Wisconsin  idea  in  inheritance 
taxation.    As  they  do  so,  double  taxation  and  cost  of  administration  must  in- 
crease greatly.     Cost  of  administration  has  not  been  excessive  in  the  past, 
merely  because  the  laws  have  not  been  enforced. 

4.  Except  in  a  few  States  the  yield  of  the  inheritance  tax  is  very  irregular. 
The  proposed  commutation  payment  by  the  Federal  Government  would  sub- 
stitute a  regular  for  an  irregular  State  revenue,  besides  greatly  decreasing  cost 
of  collection — or  prospective  cost  of  collection. 

5.  Rich  men  change  their  rendezvous  very  easily.     Rhode  Island  and  a  few 
other  States  do  not  tax  inheritances  at  present.    They  do  and  can  prevent  the 
proper  development  of  inheritance  taxes  in  other  States.     It  is  the  compulsion 
of  the  "  twentieth  man." 

6.  A  number  of  States  can  not  employ  progressive  rating  in  inheritance  tax- 
ation— an  essential  attribute  of  sound  inheritance  taxation. 

IMMIGRATION. 

19.  Underlying  the  entire  problem  of  self-government  in  this 
country,  and  placing  a  limit  on  the  ability  to  remedy  abuses  either 
through  politics  or  labor  unions,  is  the  great  variety  of  races,  nation- 
alities, and  languages.  We  know  how  the  Southern  States  have  dealt 
with  the  problem  and  how  constitutional  amendments  forced  upon 
them  by  the  Northern  States  have  been  treated.  Considering  this 
outcome,  it  is  doubtful  whether  the  additional  proposed  amendments 
designed  to  protect  rights  of  individuals  in  those  or  other  States 
would  accomplish  the  ends  intended. 

A  similar  problem  is  forced  upon  us  by  the  large  immigration  of 
backward  races  or  of  classes  from  other  countries  with  no  experience 
in  self-government.  One  of  these  races,  the  Chinese,  has  been  actu- 
ally excluded  from  immigration.  Others  less  competent  are  admit- 
ted. The  doctrine  of  a  haven  for  the  oppressed  has  been  rejected 
in  the  case  of  the  Chinese  and  can  not  consistently  be  raised  against 
restriction  on  immigration  designed  to  accomplish  a  similar  purpose 
of  protection  to  Americans.  Especially  is  the  problem  of  the  Ameri- 
canized element  in  the  labor  unions  in  maintaining  discipline  almost 
insoluble  when  it  comes  to  dealing  with  10,  20,  or  30  races  or  lan- 
guages. The  right  of  employers  to  bring  aliens  into  their  establish- 
ments is  the  same  as  their  right  to  bring  in  naturalized  or  native 
Americans.  The  resulting  situation  is  the  great  strikes  recently  en- 
tered upon  without  previous  organizations  or  discipline  by  nation- 
alities that  have  suddenly  come  together,  notwithstanding  their 
racial  antipathies  and  language  impediments,  on  account  of  a  united 
antagonism  against  their  employers.  Such  strikes  receive  but  little 
consideration  from  American  police,  sheriffs,  and  militia  and  are 
usually  defeated.  On  account  of  their  incapacity  for  self-govern- 
ment, it  might  perhaps  be  shown  that  in  isolated  communities  the 
paternal  despotism  of  a  corporation  is  preferable  to  unionism  or 
political  control  by  these  backward  nationalities.  The  violation  of 
contracts  and  inability  of  their  leaders  to  maintain  discipline  and 
observe  contracts,  which  make  some  American  employers  so  deter- 
mined against  recognizing  unions,  may  often  be  traced  back  to  the 
unruly  mixture  of  races  and  nationalities  whom  they  have  employed. 
Other  problems,  such  as  those  of  the  political  franchise,  must  be 
taken  into  account  in  any  measure  designed  to  further  restrict  immi- 
gration, but  we  are  convinced  that  very  substantial  restrictions  on 
immigration,  in  addition  to  the  present  restrictions,  should  be 

38819°— 16 15 


226  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

adopted,  and  that  comprehensive  measures  should  be  taken  to  teach 
the  English  language  and  otherwise  "Americanize  "  the  immigrants. 
One  of  the  principal  services  of  American  trade-unions  is  their  work 
in  teaching  immigrants  the  practice  of  democratic  government.  They 
might  almost  be  named  as  the  principal  Americanizing  agency.  An- 
other promising  measure  is  the  so-called  social  center,  designed  to  use 
the  schoolhouses  and  public  buildings  for  instruction  and  discussion 
outside  school  hours.  Such  a  measure,  if  adopted  by  all  States,  as 
has  been  done  by  some,  wrould  be  of  advantage  also  to  native  Ameri- 
cans in  the  free  discussion  of  public  questions. 

Since  immigration  is  one  of  the  principal  issues  between  capital 
and  labor,  its  administration  should  be  turned  over  to  the  proposed 
Federal  industrial  commission,  where  capital  and  labor  will  have  an 
equal  voice.  This  would  place  all  administrative  positions  in  the 
service,  up  to  and  including  the  Commissioner  General,  under  the 
civil-service  rules  proposed  in  paragraph  3.  In  1905,  when  a  trade- 
union  man  was  Commissioner  General,  he  was  required  by  the  ad- 
ministration to  give  written  or  oral  instructions  to  inspectors  not 
to  make  any  arrests  of  Chinese  for  deportation  as  required  by  law. 
(Washington  file,  15427  1C.)  Instead  of  resigning  and  making 
public  protest  he  yielded  and  gave  the  required  instructions,  which 
practically  nullified  the  law  by  preventing  the  deportation  of  smug- 
gled Chinese.  Had  such  orders  been  required  to  be  submitted  to  the 
advisory  council,  as  proposed  in  these  recommendations,  a  public 
protest  would  have  been  made  by  the  labor  members  of  the  council, 
since  they  would  be  responsible  to  their  unions  and  not  to  the  Gov- 
ernment for  their  salaries.  Even  now,  with  the  many  charges  of 
Chinese  smuggling,  the  presence  of  unsalaried  labor  representatives 
on  an  advisory  council,  with  the  right  to  have  access  to  all  the  records 
and  to  have  all  orders  submitted  to  them  before  issuing,  would  place 
them  in  a  position  to  prevent  such  secret  violations  of  the  law.  In 
addition  they  would  receive  through  their  fellow-unionists  through- 
out the  country  complaints  or  evidence  against  inspectors  supposed 
to  be  in  conspiracy  with  Chinese  smugglers  and  would  be  in  position 
to  present  their  charges  and  to  require  investigation  and  removal 
if  necessary.  Various  outside  commissions,  including  this  commis- 
sion, have  been  required  to  investigate  the  matter  of  Chinese  smug- 
gling, but  they  are  baffled.  The  advisory  council  proposed  would  be 
a  continuous  commission  not  terrified  by  any  political  administration 
and  having  a  voice  in  the  appointment  and  removal  of  inspectors 
under  civil-service  rules.  (See  par.  3.)  Doubtless  appeals  from  the 
commission  to  the  Department  of  State  and  the  President  should  be 
allowed  in  cases  involving  political  refugees  and  the  interpretation 
of  treaties  with  foreign  countries.  These  are  substantially  pur  con- 
clusions derived  from  the  attempted  investigation  of  Asiatic  smug- 
gling. 

FARMERS  AND  FARM  LABORERS. 

^  20.  One  of  the  growing  evils  to  be  feared  is  the  increasing  conges- 
tion of  populated  centers  at  the  expense  of  the  rural  districts.  This 
is  true  not  only  of  America  but  also  of  Europe.  The  allurements  of 
the  city  tend  to  draw  annually  thousands  from  the  country  to  the 
city.  Congested  cities,  especially  in  hard  times,  mean  enlarged  ranks 
of  the  unemployed. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  227 

This  tendency  is  strengthened  where  the  struggle  of  the  small 
farmer  not  only  to  hold  on  to  his  land  but  to  make  a  living  becomes 
hopeless  and  where  the  conditions  are  such  that  the  farm  laborer  or 
the  farm  tenant  sees  little  or  no  possibility  of  becoming  a  future 
landowner. 

Not  least  among  the  causes  of  higher  cost  of  living  has  been  the 
tendency  to  increase  city  populations  at  the  expense  of  agricultural 
populations,  thus  decreasing  relatively  the  supply  and  increasing  the 
demand  and  thereby  inevitably  raising  the  cost  of  food. 

The  last  census  shows  that  we  are  becoming  the  victims  of  increas- 
ing absentee  landlordism  and  farm  tenancy.  It  points  out  that 
while  the  number  of  farm  owners  during  the  preceding  decade  in- 
creased 8  per  cent,  the  number  of  farm  tenants  increased  16  per  cent. 
If  this  ratio  should  continue  for  a  few  more  decades,  many  parts  of 
our  Republic  will  find  themselves  in  the  condition  from  which  Ire- 
land has  so  recently  emerged. 

>  For  many  generations  Ireland  was  one  of  the  most  distressed 
countries  in  the  world.  All  of  its  evils  wTere  due  primarily  to 
absentee  landlords  and  farm  tenants.  But  within  the  last  decade  a 
wonderful  change  has  taken  place  in  the  social  and  economic  condi- 
tion of  the  Irish  peasant,  brought  about  by  the  enactment  by  Parlia- 
ment of  what  has  since  become  known  as  the  Irish  land  bill.  This 
act  created  a  royal  commission,  with  power  to  appraise  the  large 
Irish  land  estates  owned  by  absentee  landlords,  at  their  real  and  not 
at  their  speculative  value,  to  buy  them  in  the  name  of  the  Govern- 
ment at  the  appraised  value,  plus  12  per  cent  bonus,  to  cut  them  up 
into  small  parcels,  to  sell  them  to  worthy  farm  tenants,  giving  some 
TO  years'  time  in  which  to  make  small  annual  payments  on  the  amor- 
tization plan,  the  deferred  payments  bearing  but  3  per  cent  interest. 
In  addition  to  this,  the  Government  made  personal  loans  to  peasants 
sufficient  to  cover  the  cost  of  stock  and  farm  implements,  also  pay- 
able in  small  annual  installments  bearing  a  minimum  rate  of  interest. 
The  Government  further  furnished  the  various  farm  districts  with 
farm  advisors,  trained  graduates  from  agricultural  colleges,  who  act 
as  friend,  adviser,  and  scientific  farm  instructor  to  the  peasants. 
Within  a  decade  the  wretched  and  more  or  less  law-breaking  farm 
tenant  has  been  converted  into  an  industrious,  progressive,  and  law- 
abiding  landed  proprietor;  in  fact,  he  has  become  so  law-abiding 
that  many  jails  in  the  farming  districts,  formerly  filled  with  agra- 
rian criminals,  have  been  converted  into  public  schools. 

In  Texas  this  commission  found  a  condition  of  farm  tenancy  like 
that  of  Ireland  and  seemingly  typical  of  growing  conditions  in 
various  parts  of  the  country.  We  therefore  recommend  to  Congress 
and  to  the  various  States  that  steps  shall  be  taken  to  lighten  the  bur- 
dens of  the  small  farmer,  and  make  it  more  possible  to  encourage 
the  tenant,  farm  laborer,  and  city  dweller  to  become  land  proprietors. 

Not  least  among  the  burdens  of  the  small  farmer  is  the  great  diffi- 
culty, as  a  rule,  on  his  part  in  obtaining  the  necessary  credit  with 
which  to  better  and  to  improve  his  land,  at  a  low  rate  of  interest 
and  under  terms  that  will  permit  him  to  make  payments  spread  over 
a  long  term  of  years. 

Under  the  rural  credits  system  of  Germany  a  small  farmer  can 
borrow  his  money  as  cheaply  as  can  a  great  banker.  Not  only  can 
he  do  this,  but  he  can  spread  the  payments  over  a  period  of  30  or 


228  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

more  years.  It  is  this  system  of  rural  credits,  among  other  things, 
that  has  made  it  possible  for  the  German  farmer,  despite  the  high 
price  of  his  land,  his  heavy  taxes,  and  his  small  acreage,  ^not  only 
to  successfully  compete  with  the  American  farmer,  but  to  enjoy  a  fair 
degree  of  prosperity;  so  much  so  that  in  more  recent  times  there 
have  been  comparatively  few  German  agriculturists  who  have  emi- 
grated to  this  country. 

We  therefore  recommend  that  Congress  and  the  various  States  pass 
rural  credit  acts  that  will  give  to  the  small  American  farmer  the  same 
privileges  and  benefits  that  for  so  long  a  time  have  been  enjoyed  by 
the  small  farmers  in  Germany  and  other  European  countries,  which, 
following  Germany,  have  adopted  rural  credit  systems.  We  recom- 
mend serious  consideration  to  adapting  the  Irish  land  bill  and  the 
Australian  system  of  State  colonization  to  our  American  conditions. 
It  is  not  our  intention  in  this  report  to  enter  into  minute  details  as 
to  how  this  should  be  carried  out  In  a  general  way,  however,  we 
believe  it  not  only  desirable  but  practicable  for  the  Federal  Govern- 
ment, through  its  Department  of  Agriculture,  and  the  various  States, 
through  their  departments  of  agriculture,  to  secure  large  bodies  of 
land  at  appraised  actual  values,  that  have  been  thoroughly  tested  by 
experts  for  their  quality,  issuing  bonds  for  the  payment  for  same,  if 
need  be,  and  to  cut  them  up  into  small  parcels,  making  the  necessary 
improvements  and  selling  them  to  qualified  colonists  with  small  first 
payments,  making  the  balance  payable  in,  say,  30  years  on  the 
amortization  plan,  the  deferred  payments  bearing  only  the  same  rate 
of  interest  that  the  Government  itself  is  called  upon  to  pay,  plus  a 
small  addition  to  cover  the  cost  of  Government  administration.  We 
believe  in  this  way  the  most  effective  check  can  be  created,  on  the  one 
hand,  to  minimize  farm  tenancy  and,  on  the  other  hand,  to  make  it 
possible  for  the  farm  laborer  and  the  farm  tenant  to  become  land 
proprietors.  We  believe  that  this,  if  carried  out  wisely  and  intelli- 
gently, will  have  a  large  share  in  minimizing  industrial  unrest  and 
in  adding  to  the  wealth  of  the  Nation,  both  materially  and  in  the 
quality  of  its  citizenship. 

CORPORATION   CONTROL. 

21.  Corporation  control  over  politics  and  labor  has  for  a  long  time 
been  a  well-known  matter  of  serious  concern  in  all  American  States. 
This  commission  has  held  hearings  on  the  subject  of  such  control  in 
isolated  communities  at  Lead,  S.  Dak.,  Butte,  Mont.,  and  in  Colorado, 
and  other  communities  were  partly  investigated  by  a  member  of 
the  staff. 

In  Lead  we  found  a  strong  union  had  recently  been  driven  out 
on  account  of  its  sudden  demand  for  the  closed  shop,  and  this  was 
followed  by  a  paternal  absolutism  that  controlled  labor,  business, 
and  politics.  In  Butte  we  found  a  strong  union  split  into  factions 
and  destroying  its  own  property,  followed  by  refusal  of  the  corpora- 
tion to  deal  with  either  faction.  In  Colorado  we  found  a  long  his- 
tory of  refusals  to  deal  with  unions,  accompanied  by  strikes  at  inter- 
vals of  9  or  10  years.  In  each  of  these  cases  the  ownership  and  con- 
trol of  the  property  was  in  the  hands  of  absentees,  who  left  the  oper- 
ating management  to  executives  on  the  ground. 

We  condemn  the  conditions  found  in  Colorado  which  show  the 
control  of  corporations  over  labor  and  politics,  and  we  find  there  a 


EEPOET  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  229 

system  that  has  taken  hold  throughout  the  country.  Here  the  serious 
problem  is  not  the  personality  of  any  individual  who  may  or  may  not 
be  responsible,  but  the  correction  of  a  system  which  has  grown  up 
mainly  under  absentee  ownership  and  which  determines  the  acts  of 
individuals  according  to  their  self-interest  within  the  terms  pre- 
scribed by  the  system.  Immediate  and  public  action  is  necessary  to 
see  that  courts  of  justice  are  not  prostituted  to  the  service  of  one 
class  against  another,  but  the  huge  system  of  corporate  control  re- 
quires more  far-reaching  remedies  before  attainment.  Absentee  own- 
ership can  not  be  brought  to  the  sense  of  its  responsibility  without 
the  enactment  and  adequate  enforcement  of  workmen's  compensa- 
tion for  accidents  and  occupational  diseases,  sickness,  invalidity,  and 
old-age  insurance.  Meanwhile  a  partial  method  of  meeting  its  re- 
sponsibility is  a  staff  of  safety,  health,  and  labor  commissioners, 
independent  of  the  local  executive  staff,  to  report  directly  to  the 
board  of  directors.  The  work  of  such  a  staff  is  directly  in  conflict 
with  that  of  the  executive  staff,  for  the  latter  must  get  out  "pro- 
duction '5  while  the  other  must  acquaint  the  directors  and  company 
with  the  oppression  of  labor  which  increased  production  and  lowei 
costs  often  bring.  The  labor  department  can  not  be  made  subordi- 
nate to  the  executive  department  if  the  corporation  really  intends  to 
safeguard  its  employees. 

We  are  not  in  favor  of  public  ownership  as  solely  a  matter  of 
improving  labor  conditions,  and  before  such  can  be  recommended 
there  should  be  a  more  complete  investigation  and  regulation  and  a 
clearing  up  of  the  values  that  will  be  paid  and  the  administrative 
control  that  will  follow.  More  immediate  and  necessary  is  a  series 
of  laws  that  will  take  the  control  of  politics  out  of  the  hands  of 
corporations  and  place  it  in  the  hands  of  the  people.  Several  of 
our  previous  recommendations  are  intended  to  accomplish  this  pur- 
pose in  so  far  as  labor  and  capital  are  concerned,  but  we  should  add 
effective  corrupt  practices  acts,  designed  to  protect  the  secret  ballot, 
to  limit  the  amount  of  money  and  number  of  paid  electioneered  in 
elections,  to  prevent  intimidation,  and  so  on,  as  far  as  elections  are 
menaced  by  political  machines  and  wealth.  Direct  primaries  for 
the  nomination  of  candidates,  protected  by  corrupt  practices  acts. 
Constitutional  and  legislative  initiative  for  State  and  Federal  Gov- 
ernments. The  initiative  would  permit  the  people  to  change  the 
Constitution  at  any  point  where  the  courts  had  depended  upon  it  for 
a  decision,  and  would  make  unnecessary  any  provision  for  recall  of 
Supreme  Court  judges  or  of  their  decisions,  or  of  taking  from  higher 
courts  their  power  to  declare  laws  unconstitutional.  The  recall  of 
elected  officials,  including  executives  and  judges  of  the  lower  courts, 
but  not  judges  of  the  supreme  courts  or  members  of  the  legislature. 
Proportional  representation,  as  adopted  in  Belgium,  South  Africa, 
Australia,  and  the  Irish  parliament,  by  which  all  parties  or  factions 
would  be  able  to  elect  their  own  representatives  in  the  legislatures 
or  Congress  in  proportion  to  their  numbers  and  without  making 
deals  with  other  parties.  This  would  permit  a  labor  party  to  have 
its  representatives,  as  well  as  other  minor  parties,  and  would  permit 
women,  who  we  consider  should  have  the  suffrage,  and  other  minor 
parties  to  elect  their  own  representatives  without  making  com- 
promises in  order  to  get  the  votes  of  the  major  parties.  These  minor 


230  REPORT  OF   COMMISSION"   ON  INDUSTRIAL  RELATIONS. 

parties,  containing  as  they  do  the  advanced  views  on  labor  and  social 
problems,  are  entitled  to  their  proportionate  share  of  influence  in  the 
legislatures  or  Congress.  It  can  be  seen  that  such  a  measure  would 
take  away  from  corporations  much  of  their  present  inducement  to 
control  the  great  parties.  It  would  furnish  a  legislature  which 
would  be  a  true  reflection  of  the  wishes  of  all  the  people.  This 
recommendation  applies  to  the  legislature  the  principle  of  repre- 
sentation of  interests,  which  we  advance  in  the  case  of  the  advisory 
council  to  the  Industrial  Commission. 

JOHN  R.  COMMONS. 
FLORENCE  J.  HARRIMAN. 
HARRIS  WEINSTOCK.1 
S.  THRUSTON  BALLARD.1 
RICHARD  H.  AisHTON.2 


.  —  Commissioner  Weinstock  also  presented  the  following  dis- 
senting opinion  : 

I  dissent  from  the  report  prepared  by  Commissioner  Commons  on 
the  question  of  immigration.  That  report  says  : 

We  are  convinced  that  very  substantial  restrictions  on  immigration,  in  addi- 
tion to  the  present  restrictions,  should  be  adopted. 

I  am  of  the  opinion  that  we  have  abundant  immigration  laws 
already  on  our  statute  books  which,  if  enforced,  will  keep  out  of  the 
country  unfit  immigrants.  In  normal  times  this  country  can  profit- 
ably employ  all  the  desirable  and  fit  occidental  immigrants  that 
knock  at  our  door,  thereby  adding  greatly  to  the  wealth  and  the 
strength  of  the  Nation. 

HARRIS  WEINSTOCK. 

1  See  supplementary  reports. 

3  See  supplementary  report.  Appointed  commissioner  Mar.  17,  1915,  to  serve  the  unei- 
pired  term  of  Hon.  F.  A.  Delano,  resigned. 


REPORT  OF  COMMISSIONERS  WEINSTOCK,  BALLARD,  AND 

AISHTON. 

We  concur  in  the  report  prepared  by  Commissioner  Commons, 
dissenting,  however,  on  the  two  following  points,  and  supplementing 
it  by  certain  other  findings  and  recommendations  following  herewith. 

First.  We  dissent  from  the  recommendation  that  the  secondary 
boycott  should  be  legalized.  We  regard  the  secondary  boycott  as 
unjust,  inequitable,  and  vicious,  in  that  it  subjects  third  and  inno- 
cent parties  to  injury  and,  at  times,  to  great  loss  if  not  ruin.  We 
are,  therefore,  as  much  opposed  to  it  as  we  are  to  the  blacklist. 
There  have  been  instances  where,  for  example,  a  strike  would  occur 
on  a  newspaper.  The  strikers  would  demand,  for  example,  that  a 
certain  business  house  advertising  in  such  paper  should,  despite  the 
fact  that  it  was  under  contract,  withdraw  its  patronage,  and  on  re- 
fusal of  the  advertiser  to  violate  its  contract  with  the  newspaper,  it 
became  the  victim  of  boycotts  at  the  hands  of  the  strikers  more  or 
less  injurious,  if  not  disastrous,  in  their  results  to  such  advertiser. 
The  Supreme  Court  of  the  United  States  has,  in  our  opinion,  wisely 
and  justly  declared  the  secondary  boycott  illegal,  and  we  regard  it 
as  an  injury  to  society  to  legalize  a  system  so  vicious. 

It  has  been  pointed  out  that — 

*  *  *  the  boycott  is  the  chief  weapon  of  modern  unionism,  and  also 
characteristic  generally  of  its  spirit  and  methods.  A  discussion  of  a  boycott 
as  a  mere  withdrawal  of  patronage  is  idle  and  academic.  When  that  is  the 
extent  of  the  boycott  in  any  particular  case,  the  patronage  is  simply  with- 
drawn, and  nothing  more  is  heard  about  it.  From  that  simple  procedure  the 
modern  boycott  has  been  developed  into  a  very  different  thing,  and  what  has 
become  known  as  the  secondary  boycott,  dragging  in  third  parties  to  the  dis- 
pute and  penalizing  them  for  patronizing  one  of  the  parties  to  the  dispute,  has 
played  an  important  part. 

Dealing  with  this  phase  of  the  question,  Judge  William  H.  Taft, 
in  an  early  case  (1893),  said: 

The  boycott  is  a  combination  of  many  to  cause  a  loss  to  one  person  by 
coercing  others  against  their  will  to  withdraw  from  him  beneficial  business 
intercourse  by  threats  that  unless  those  others  do  so,  the  many  will  cause 
serious  loss  to  them. 

In  the  case  of  Moore  v.  The  Bricklayers'  Union,  Judge  'William 
H.  Taft  says : 

The  conflict  was  brought  about  by  the  effort  of  defendants  to  use  plaintiff's 
right  of  trade  to  injure  Parker  Bros.,  and,  upon  failure  of  this,  to  use  plain- 
tiff's customers'  rights  of  trade  to  injure  the  plaintiff.  Such  effort  can  not  be 
in  the  bona  fide  exercise  of  trade,  is  without  just  cause,  and  is  therefore  ma- 
licious. The  immediate  motive  of  defendants  here  was  to  show  to  the  build- 
ing world  what  punishment  and  disaster  necessarily  follows  a  defiance  of  their 
demands.  The  remote  motive  of  wishing  to  better  their  condition  by  the  power 
so  acquired  will  not,  as  we  think  we  have  shown,  make  any  legal  justification 
for  defendants'  acts.  We  are  of  the  opinion  that  even  if  acts  of  the  character 
and  with  the  intent  shown  in  this  case  are  not  actionable  when  done  by  in- 
dividuals, they  become  so  when  they  are  the  result  of  combination,  because  it 
is  clear  that  the  terrorizing  of  a  community  by  threats  of  exclusive  dealing  in 
order  to  deprive  one  obnoxious  member  of  means  of  sustenance,  will  become 
both  dangerous  and  oppressive. 

231 


232  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

The  Anthracite  Coal  Strike  Commission,  in  its  report  in  touching 
upon  secondary  boycotts,  says: 

It  was  attempted  to  define  the  boycott  by  calling  the  contest  between  em- 
ployers and  employees  a  war  between  capital  and  labor,  and  pursuing  the 
analogies  of  the  word,  to  justify  thereby  the  cruelty  and  illegality  of  conduct 
on  the  part  of  those  conducting  the  strike.  The  analogy  is  not  apt,  and  the 
argument  founded  upon  it  is  fallacious. 

There  is  only  one  war-making  power  recognized  by  our  institutions,  and  that 
is  the  Government  of  the  United  States  and  of  the  States  in  subordination 
thereto,  when  repelling  invasion  or  domestic  violence.  War  between  citizens 
is  not  to  be  tolerated,  and  can  not  in  the  proper  sense,  exist.  If  attempted 
it  is  unlawful,  and  is  to  be  put  down  by  the  sovereign  power  of  the  State  and 
Nation.  The  practices  which  we  are  condemning  would  be  outside  the  pale 
of  civilized  warfare.  In  civilized  warfare,  women  and  children,  and  the 
defenseless  are  safe  from  attack,  and  a  code  of  honor  controls  the  parties 
to  such  warfare,  which  cries  out  against  the  boycott  we  have  in  view.  Cruel 
and  cowardly  are  terms  not  too  severe  by  which  to  characterize  it. 

Second.  We  further  dissent  from  said  report  in  its  limitation  of 
public  inquiry  in  labor  disputes  only  to  cases  where  both  sides  invite 
such  inquiry.  We  believe  that  in  the  public  interest  there  are  times 
when  compulsion  in  labor  disputes  is  thoroughly  justified.  We  feel, 
with  organized  labor,  that  there  should  be  no  restriction  put  upon 
the  right  to  strike,  realizing  as  we  do,  that  the  strike  is  the  only 
weapon  which,  in  the  interest  of  labor,  can  be  effectively  and  legally 
used  to  aid  in  bettering  its  conditions.  We  feel,  also,  that  there 
should  be  no  restriction  placed  upon  the  employer  in  his  right  to 
declare  a  lockout  in  order  better  to  protect  what  he  regards  as  his 
interest,  and  we  therefore  would  not  favor  any  plan  that  would  inflict 
penalties  upon  the  worker  or  upon  the  employer  for  declaring  a 
strike  or  lockout. 

Where  the  two  sides  to  a  labor  controversy  are  fairly  well  bal- 
anced in  strength,  the  winning  side  must  depend,  in  the  last  analysis 
upon  the  support  of  public  opinion.  Public  opinion,  therefore,  be- 
comes a  most  important  factor  in  the  interest  of  industrial  peace. 
Such  public  opinion,  however,  to  be  of  value,  must  be  enlightened. 
Under  prevailing  conditions  this  is  almost  impossible.  All  that  the 
public  is  now  able  to  get,  as  a  rule,  are  garbled  and  ex  parte  state- 
ments, more  or  less  misleading  and  unreliable,  which  simply  tend  to 
confuse  the  public  mind. 

Where  strikes  and  lockouts  take  place  on  a  large  scale,  and  more 
especially  in  connection  with  public  utilities,  the  public  inevitably 
becomes  a  third  party  to  the  issue,  in  that  it  has  more  at  stake  than 
both  parties  to  the  dispute  combined.  For  example,  if  the  street 
railways  of  a  large  city  are  tied  up,  the  loss  to  the  railway  companies 
in  the  way  of  revenue,  and  to  the  workers  in  the  way  of  wages,  is 
great,  but  this  loss  becomes  insignificant  compared  with  the  loss 
inflicted  upon  the  rest  of  the  community,  to  say  nothing  of  the  an- 
noyance, inconvenience,  and  menace  to  life  and  property,  which  not 
infrequently  occur  in  such  industrial  disputes.  The  public,  therefore, 
as  the  third  party  to  the  issue,  is  justified  in  demanding  that  an 
investigation  take  place,  and  that  the  facts  be  ascertained  and  pre- 
sented in  an  impartial  spirit  to  the  general  public,  so  that  ways  and 
means  may  be  found  of  adjudicating  the  dispute  or  of  throwing  the 
influence  of  a  properly  informed  public  opinion  on  the  side  which  has 
the  right  in  its  favor. 


REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS.  233 

We,  therefore,  earnestly  •  recommend  that  in  the  case  of  public 
utilities,  the  proposed  industrial  commission  shall  not  only  have 
power  to  mediate  and  conciliate,  but  also,  at  the  request  of  either 
side  to  a  dispute,  or  upon  the  initiative  of  the  commission  itself, 
should  have  the  power,  all  voluntary  methods  having  failed,  to 
undertake  a  compulsory  public  inquiry  when,  in  the  discretion  of 
the  commission,  public  interest  demands  it;  that  it  be  given  the 
fullest  powers  to  summon  witnesses,  place  them  under  oath,  demand 
books  and  documents,  all  with  a  view  of  ascertaining  the  under- 
lying causes  of  the  dispute  and  the  issues  involved,  to  the  end  of 
making  recommendations  that,  in  the  judgment  of  the  board  of  in- 
quiry, consisting  of  three  members,  one  to  be  chosen  by  each  side 
and  the  third  to  be  chosen  by  these  two,  would  be  a  fair  and  reason- 
able settlement  of  the  points  in  dispute.  It  being  understood,  how- 
ever, that  neither  side  is  obliged  to  accept  such  recommendations,  but 
may  continue  to  strike  or  lockout,  as  the  case  may  be.  Meanwhile, 
however,  the  public  will  have  ascertained  in  the  most  reliable  way 
the  issues  involved,  the  facts  as  they  have  been  found  by  the  board 
of  inquiry,  and  the  basis  upon  which  a  fair  settlement  can  be  estab- 
lished, thus  enabling  the  public  more  intelligently  to  throw  its  sup- 
port where  it  rightfully  belongs. 

With  the  two  foregoing  modifications,  we  heartily  concur  in  the 
report  prepared  by  Commissioner  Commons.  We  desire,  however, 
additionally,  to  report  as  follows: 

We  find  that  the  alleged  findings  of  fact  and,  in  a  general  way, 
the  comments  thereon  made  in  the  report  of  the  staff  of  this  commis- 
sion, under  the  direction  of  Mr.  Basil  M.  Manly,  which  has  ^been 
made  a  part  of  the  records  of  this  commission,  without  the  indorse- 
ment, however,  of  the  commission,  so  manifestly  partisan  and  unfair 
that  we  can  not  give  them  our  indorsement.  What  we  regard  as  the 
desirable  recommendations  in  the  report  of  Mr.  Manly  are  dealt  with 
to  our  satisfaction  in  the  Commons  report,  which  has  our  approval. 

We  find  that  Mr.  Manly's  report  places  practically  all  the  responsi- 
bility for  the  causes  of  industrial  unrest  at  the  doors  of  one  side, 
forgetting  that  both  sides  to  the  issues  are  human,  and,  being  human, 
are  guilty  of  their  fullest  share  of  wrongdoing,  and  are  alike  respon- 
sible in  greater  or  lesser  degree,  for  the  causes  of  industrial  unrest. 

We  are,  therefore,  prompted,  in  the  interest  of  fairness  and  justice, 
to  present  herewith  some  of  the  additional  causes  of  industrial 
unrest  that,  in  the  course  of  the  investigations  and  public  hearings 
of  the  commission,  have  forced  themselves  upon  our  attention. 

Despite  the  fact  that  we  have  been  appointed  to  represent,  on  this 
commission,  the  employers  of  the  Nation,  we  are  free  to  admit  that 
the  investigations  made  by  the  commission,  and  the  testimony 
brought  forth  at  our  public  hearings,  have  made  it  plain  that  em- 
ployers, some  of  them,  have  been  guilty  of  much  wrongdoing,  and 
have  caused  the  workers  to  have  their  fullest  share  of  grievances 
against  many  employers.  There  has  been  an  abundance  of  testimony 
submitted  to  prove  to  our  satisfaction  that  some  employers  have 
resorted  to  questionable  methods  to  prevent  their  workers  from  or- 
ganizing in  their  own  self-interest;  that  they  have  attempted  to 
defeat  democracy  by  more  or  less  successfully  controlling  courts  and 
legislatures;  that  some  of  them  have  exploited  women  and  children 
and  unorganized  workers;  that  some  have  resorted  to  all  sorts  of 


234  REPORT  OP   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

methods  to  prevent  the  enactment  of  remedial  industrial  legislation ; 
that  some  have  employed  gunmen  in  strikes,  who  were  disreputable 
characters,  and  who  assaulted  innocent  people  and  committed  other 
crimes  most  reprehensible  in  character;  that  some  have  paid  lower 
wages  than  competitive  conditions  warranted,  worked  their  people 
long  hours  and  under  insanitary  and  dangerous  conditions;  that 
some  have  exploited  prison  labor  at  the  expense  of  free  labor;  that 
some  have  been  contract  breakers  with  labor ;  that  some  have  at  times 
attempted,  through  the  authorities,  to  suppress  free  speech  and  the 
right  of  peaceful '  assembly ;  and  that  some  have  deliberately,  for 
selfish  ends,  bribed  representatives  of  labor.  All  these  things,  we 
find,  tend  to  produce  industrial  unrest,  with  all  its  consequent  and 
far-reaching  ills. 

There  is,  therefore,  no  gainsaying  the  fact  that  labor  has  had 
many  grievances,  and  that  it  is  thoroughly  justified  in  organizing 
and  in  spreading  organization  in  order  better  to  protect  itself  against 
exploitation  and  oppression. 

On  the  other  hand,  in  justice  to  employers  generally,  it  must  be 
said  that  there  has  been  much  evidence  to  show  that  there  is  an 
awakening  among  the  enlightened  employers  of  the  Nation,  who  have 
taken  a  deeper  personal  interest  in  the  welfare  of  their  workers  than 
ever  before  in  industrial  history;  that  such  enlightened  employers 
are  growing  in  number  and  are  more  and  more  realizing  that,  if  for 
no  other  reason,  it  is  in  their  own  self-interest  to  seek  the  welfare 
of  their  workers  and  earnestly  to  strive  to  better  their  conditions. 
Employers,  on  their  own  initiative,  have  created  sick  funds  and  pen- 
sion funds ;  have  expended  vast  sums  of  money  to  insure  greater 
safety  to  their  workers;  have,  as  compared  with  conditions  of  the 
past,  greatly  improved  their  methods  of  sanitation ;  have  done  much 
to  regularize  employment;  have  increased  wages;  and  in  every  way 
have  endeavored  to  lighten  the  burdens  of  their  workers. 

While  there  are  many  deplorable  conditions  yet  remaining  to  be 
rectified,  and  while  the  condition  of  the  worker  is  still  far  from  ideal, 
we  believe  that,  on  the  whole,  the  impartial  investigator  must  find 
that,  in  normal  times,  on  the  average,  the  hours  of  the  American 
worker  are  the  shortest,  his  wages  the  highest,  his  working  conditions 
the  most  favorable,  his  standard  of  living  the  highest,  and  his  gen- 
eral well-being  the  best  in  the  world's  industrial  history. 

Industrial  Commissioner  John  B.  Lennon,  who  is  also  a  member 
of  the  executive  council  of  the  American  Federation  of  Labor,  in  the 
absence  of  official  figures  has  estimated  that  there  are  at  this  time 
about  20,000,000  wage  earners  in  the  United  States,  and  that  about 
3,250,000  of  these  are  members  of  various  labor  unions.  In  other 
words,  as  a  liberal  approximation,  about  16  per  cent  of  the  wage 
earners  of  America  are  members  of  trade  unions. 

Considering  that  the  American  Federation  of  Labor  came  into 
life  in  1881,  some  34  years  ago,  and  considering  the  earnest  and 
zealous  efforts  that  have  been  made  by  its  representatives  and  the 
representatives  of  other  labor  organizations  to  agitate,  educate,  and 
organize,  and  considering  still  further  the  highly  commendable  ob- 
jects professed  by  organized  labor,  the  membership  results  are  dis- 
appointingly small. 

One  reason  given  for  the  comparatively  small  percentage  of  union- 
ists in  the  ranks  of  labor  is  the  hostility  against  unionism  on  the  part 


REPORT  OF   COMMISSION   O'N   INDUSTRIAL   RELATIONS.  235 

of  many  employers.  Organized  labor  points  out  that  there  are  many 
employers'  associations  that  are  organized  not  to  deal  with,  but  to 
fight,  unionism,  and  that  this,  in  many  instances,  and  more  especially 
in  the  larger  industrial  enterprises,  presents  a  very  serious  obstacle 
for  organized  labor  to  meet  and  to  overcome. 

Representing  as  we  do  on  this  commission  the  employers'  side,  we 
are  as  one  with  the  other  members  of  our  Federal  commission  who 
represent  the  general  public,  and  also  with  those  representing  or- 
ganized labor,  in  believing  that,  under  modern  industrial  conditions, 
collective  bargaining,  when  fairly  and  properly  conducted,  is  con- 
ducive to  the  best  good  of  the  employer,  the  worker,  and  society. 
We  find  that  there  are  many  enlightened  employers  who  concur  in 
this  view,  who  in  the  past  recognized  and  dealt  with  organized  labor, 
but  who  now  refuse  to  do  so,  and  who,  under  proper  conditions, 
would  willingly  continue  to  engage  in  collective  bargaining.  With 

food  cause,  in  our  opinion,  however,  they  place  the  responsibility 
or  their  refusing  to  do  so  at  the  door  of  organized  labor.  There  is 
an  abundance  of  available  testimony  in  our  records  to  show  that 
many  employers  are  frightened  off  fi«om  recognizing  or  dealing  with 
organized  labor  for  fear  that  to  do  so  means  to  put  their  heads  in 
the  noose  and  to  invite  the  probability  of  seriously  injuring,  if  not 
ruining,  their  business. 

The  prime  objection  that  such  employers  have  to  recognizing  and 
dealing  with  organized  labor  is  the  fear  of  (a)  sympathetic  strikes, 
(&)  jurisdictional  disputes,  (c)  labor  union  politics,  (d)  contract 
breaking,  (e)  restriction  of  output,  (/)  prohibition  of  the  use  of  non- 
union-made tools  and.  materials,  (g)  closed  shop,  (h)  contests  for 
supremacy  between  rival  unions,  (i)  acts  of  violence  against  non- 
union workers  and  the  properties  of  employers,  (j)  apprenticeship 
rules. 

While  we  have  found  many  sinners  among  the  ranks  of  the  em- 
ployers, the  result  of  our  investigation  and  inquiries  forces  upon  us 
the  fact  that  unionists  also  can  not  come  into  court  with  clean  hands ; 
that  this  is  not  a  case  where  the  saints  are  all  on  one  side  and  the 
sinners  all  on  the  other.  We  find  saints  and  sinners,  many  of  them, 
on  both  sides. 

The  hope  of  future  industrial  peace  must  lie  in  both  sides  using 
their  best  endeavors  to  minimize  the  causes  that  lead  to  the  growth 
of  sins  and  sinners  on  each  side  of  the  question. 

SYMPATHETIC   STRIKES. 

• 

Taking  up  seriatim  the  objections  offered  by  many  employers  to 
recognizing  and  dealing  with  organized  labor,  we  come  first  to  that 
of  the  sympathetic  strike.  The  employer  contends,  and  we  find  our- 
selves in  sympathy  with  his  contention,  that  it  is  a  rank  injustice  to 
subject  him  to  a  strike  of  his  employees  who  have  absolutely  no 
grievances,  to  stop  work  because  some  other  group  of  workers, 
possibly  at  a  remote  point,  have  a  real  or  fancied  grievance  against 
their  own  employer,  especially  when  such  stoppage  of  work  may 
not  only  inflict  a  very  serious  loss,  but  may  mean  ruin  to  the  enter- 
prise of  the  innocent  employer,  thus  making  it,  in  violation  of  all  the 


236  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

equities,  a  clear  case  of  punishing  the  many  innocent  for  the  one  or 
the  few  who  may  be  guilty,  who  were  party  to  the  original  dispute. 

JURISDICTIOXAL  DISPUTES. 

The  employer  further  points  out  that  not  only  is  his  business  liable 
to  be  ruined  by  the  S37mpathetic  strike,  but,  more  especially  in  the 
building  trades,  is  he  likely  to  become  an  innocent  victim  of  jurisdic- 
tional  disputes  for  which  he  is  in  no  wise  responsible  and  over  which 
he  has  absolutely  no  control. 

Sidney  and  Beatrice  Webb  point  out  that — 

It  is  no  exaggeration  to  say  that  to  the  competition  between  overlapping 
unions  is  to  be  attributed  about  nine-tenths  of  the  ineffectiveness  of  the  trade- 
union  world.1 

Innumerable  instances  have  occurred  where  jurisdictional  strikes  have  lasted 
for  months  and  sometimes  for  years.2 

The  elevator  constructors  had  a  serious  and  costly  dispute  with  the  machinists 
in  Chicago  over  the  installation  of  pumps  connected  with  hydraulic  elevators. 
A  strike  resulted  for  more  than  two  years,  during  which  most  of  the  elevator 
men  in  the  city  were  out  of  work  while  members  of  the  machinists  and  other 
unions  supplied  their  places  with  the  Otis  Elevator  Co.2 

In  1910  the  secretary  of  the  bricklayers  said : 

Our  disputes  with  the  operative  plasters'  union  during  the  past  year  have 
taken  thousands  of  dollars  out  of  our  international  treasury  for  the  purpose  of 
protecting  our  interest.  The  loss  in  wages  to  our  members  has  amounted  to  at 
least  $300,000.  The  loss  to  our  employers  has  been  up  in  the  thousands,  also.2 

Prof.  Commons,  in  his  studies  of  the  New  York  building  trades, 
comments  on  the  jurisdictional  disputes  as  follows: 

Building  construction  was  continuously  interrupted,  not  on  account  of  lock- 
outs, low  wages,  or  even  employment  of  nonunion  men,  but  on  account  of 
fights  between  the  unions.  A  friendly  employer  who  hired  only  union  men,  along 
with  the  unfriendly  employer,  was  used  as  a  club  to  hit  the  opposing  union,  and 
the  friendly  employer  suffered  more  than  the  other.3 

The  Chicago  machinery  movers  caused  considerable  delay  in  the  construction 
of  the  Harris  Trust  Building,  and  in  a  period  of  less  than  a  year  were  re- 
sponsible for  no  less  than  50  separate  strikes,  during  which  the  work  of  the 
employers  was  delayed.4 

Jurisdictional  disputes  waste  both  labor  and  capital.  They  make  it  imprac- 
ticable in  many  cases  to  use  improved  appliances  and  cheaper  materials.  They 
are  responsible  for  hesitancy  in  undertaking  and  increasing  expense  in  prose- 
cuting buildings,  to  the  detriment  of  the  building  industry.4 

Finally,  where  the  disputes  are  long  continued,  they  are  responsible  for  that 
whole  train  of  evil  results  which  follows  upon  idleness  and  poverty.6 

Sidney  and  Beatrice  Webb  agnin  point  out  that  in  the  industries  of  Tyne- 
side,  within  a  space  of  35  months,  there  were  35  weeks  in  which  one  or  the 
other  of  the  four  most  important  sections  of  workmen  in  the  staple  industry  of 
the  district  absolutely  refused  to  wTork.  This  meant  compulsory  idleness  of 
tens  of  thousands  of  men,  the  selling  out  of  households,  and  the  semistarvation 
of  whole  families  totally  unconcerned  with  the  disputes,  while  it  left  the  unions 
in  a  state  of  weakness  from  which  it  will  take  years  to  recover.6 

That  wise  and  far-seeing  labor  leaders  keenly  appreciate  the  great 
wrongs  inflicted  not  only  upon  the  employers,  but  upon  the  workers 
themselves,  by  virtue  of  cessation  of  work  in  jurisdictional  disputes, 
is  emphasized  by  the  following  extracts  from  the  report  of  Mr. 

1  Industrial  Democracy,  vol.  1,  p.  121. 

2  The  Bricklayer  and  Mason,  February,  1911,  p.  127. 

3  Trade-Unionism  and  Labor  Problems. 

4  Interview,  secretary  of  Building  Employers'  Association,  Chicago,  July,  1912. 

5  Industrial  Democracy,  vol.   1,  p.  121. 
«  Ibid.,  vol.  2,  p.   513. 


EEPORT  OF   COMMISSION   ON   INDUSTRIAL   RELATIONS.  237 

Samuel  Gompers,  president  of  the  American  Federation  of  Labor,  at 
its  convention  in  1902: 

Beyond  doubt,  the  greatest  problem,  the  danger  which  above  all  others  is 
threatening  not  only  the  success  but  the  very  existence  of  the  American  Federa- 
tion of  Labor,  is  the  question  of  jurisdiction.  Unless  our  affiliated  national 
and  international  unions  radically  and  soon  change  their  course,  we  shall,  at  no 
distant  date,  be  in  the  midst  of  an  internecine  contest  unparalleled  in  any  era 
of  the  industrial  world,  aye,  not  even  when  workmen  of  different  trades  were 
arrayed  against  each  other  behind  barricades  over  the  question  of  trade  against 
trade.  They  naturally  regard  each  other  with  hatred,  and  treat  each  other  as 
mortal  enemies. 

There  is  scarcely  an  affiliated  organization  which  is  not  engaged  in  a  dispute 
with  another  organization  (and  in  some  cases,  with  several  organizations) 
upon  the  question  of  jurisdiction.  It  is  not  an  uncommon  occurrence  for  an 
organization,  and  several  have  done  so  quite  recently,  to  so  change  their  laws 
and  claims  to  jurisdiction  as  to  cover  trades  never  contemplated  by  the  or- 
ganizers, officers,  or  members;  never  comprehended  by  their  titles,  trades  of 
which  there  is  already  in  existence  a  national  union.  And  this  without  a  word 
of  advice,  counsel,  or  warning. 

I  submit  that  it  is  untenable  and  intolerable  for  an  organization  to  attempt 
to  ride  roughshod  over  and  trample  under  foot  rights  and  jurisdiction  of  a 
trade,  the  jurisdiction  of  which  is  already  covered  by  an  existing  organization. 
This  contention  for  jurisdiction  has  grown  into  such  proportions  and  is  fought 
with  such  an  intensity  as  to  arouse  many  bitter  feuds  and  trade  wars.  In 
many  instances  employers  fairly  inclined  for  organized  labor  are  made  inno- 
cently to  suffer  from  causes  entirely  beyond  their  control. 

As  proof  of  the  prophetic  and  far-sighted  utterances  of  President 
Gompers,  it  has  been  pointed  out  that  "  in  1911,  in  Chicago,  his 
grim  prophecy  was  actually  fulfilled  in  the  bitter  jurisdictional  wars 
fought  by  rival  unions  in  that  city  in  which  paid  thugs  and  gunmen 
turned  the  streets  of  Chicago  into  a  condition  of  anarchy,  and  in 
which,  as  a  mere  incident  from  the  union  standpoint,  millions  of 
dollars  of  construction  work  remained  idle,  with  a  resultant  loss  to 
owners,  contractors,  and  the  business  interest  of  the  city  beyond  pos- 
sibility of  calculation." 

We  ask,  what  sane  or  thoughtful  employer  would  willingly  put  his 
head  in  a  noose  such  as  this  by  recognizing  and  dealing  with  unions, 
and  thus  invite  possible  ruin  ? 

LABOR  UNIOtf   POLITICS. 

• 

The  third  objection  of  employers  to  recognizing  and  dealing  with 
organized  labor  is  the  risk  they  run,  especially  in  the  building  trades, 
where  power  to  declare  a  strike  is  concentrated  in  the  hands  of  a 
business  agent,  of  finding  themselves  at  the  mercy  of  either  a  cor- 
rupt business  agent  or  one  who,  for  the  sake  of  union  politics,  is 
endeavoring,  in  order  to  perpetuate  himself  in  office,  to  make  capital 
at  the  expense  of  the  innocent  employer  by  making  unwarranted  and 
unreasonable  demands  against  the  employer. 

CONTRACT  BREAKING. 

The  fourth  reason  offered  by  the  employers  for  refusing  to  recog- 
nize or  to  deal  with  organized  labor,  is  its  increasing  unreliability 
in  keeping  trade  agreements.  To  give  one  case  in  point,  our  record 
gives  the  story  in  undisputed  statement  published  in  the  United 
Mine  Workers'  Journal,  which  is  the  official  organ  of  the  United 
Mine  Workers  of  America,  written  by  Mr.  W.  O.  Smith,  ex-chair- 
man of  the  executive  committee  of  the  Kentucky  District  of  United 


238  KEPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

Mine  Workers  of  America,  in  which  Mr.  Smith,  among  other  things, 
says : 

Because  of  the  indifference  of  the  conservative  members  of  our  unions,  and 
the  activity  of  the  radical  element  which  is  responsible  for  the  greatest  menace 
which  has  ever  threatened  the  United  Mine  Workers  of  America,  the  local 
strike,  during  the  past  two  or  three  years  the  international,  as  well  as  the 
district  and  subdistrict  officials,  have  been  confronted  with  many  perplexing 
problems,  some  of  which  seem  to  threaten  the  very  life  of  the  organization. 
But  I  believe  I  am  safe  in  saying  that  no  problem  has  given  them  so  much 
concern  as  the  problem  of  local  strikes  in  violation  of  agreements. 

Thousands  of  dollars  are  expended  every  year  in  an  effort  to  organize  the 
250,000  nonunion  miners  in  the  United  States,  while  hundreds  of  our  members 
go  on  strike  almost  every  day  in  absolute,  unexcusable  violation  of  existing 
agreements.1 

This  criticism  comes  not  from  an  e'mployer,  but  from  an  ardent, 
earnest  unionist,  in  high  standing  in  his  organization. 

Corroborating  the  statement  of  Mr.  Smith,  comes  a  statement  pub- 
lished in  Coal  Age  of  December  20,  1913,  issued  by  the  Association 
of  Bituminous  Coal  Operators  of  Central  Pennsylvania,  addressed  to 
Mr.  Patrick  Gilday,  president  of  District  No.  2,  U.  M.  W.  of  A., 
Morrisville  mines,  Pennsylvania,  dated  Philadelphia,  December  12^ 
1913,  in  w.hich,  among  other  things,  the  following  appears : 

Whereas,  Rules  12  and  13  of  said  agreement  provide,  "  that  should  differences 
arise  between  the  operators  and  mine  workers  as  to  the  meaning  of  the  pro- 
visions of  this  agreement  or  about  matters  not  specifically  mentioned  in  this 
agreement,  there  shall  be  no  suspension  of  work  on  account  of  such  difference, 
but  an  earnest  effort  be  made  to  settle  such  differences  immediately."  Whereas, 
notwithstanding  the  fact  that  Rule  15  provides  the  right  to  hire  and  discharge, 
the  management  of  the  mine  and  the  direction  of  the  working  forces  are  vested 
exclusively  in  the  operator,  the  United  Mine  Workers  of  America  have  abso- 
lutely disregarded  this  rule,  in  that  they  have  at  numerous  times  served  notices 
on  substantially  every  operator  belonging  to  our  association,  that  unless  all  the 
employees  working  for  such  operators  should  become  members  of  the  union  on 
or  before  certain  dates  mentioned  in  said  notices,  that  they,  the  Mine  Workers, 
would  close  or  shut  down  the  operators'  respective  mines,  and  in  many  instances 
did  close  the  mines  for  this  reason,  and  refused  to  return  to  work  unless  such 
nonunion  employees  were  discharged.  This  conduct  is  in  direct  violation  of 
the  contract,  and  specifically  interferes  writh  and  abridges  the  right  of  the  oper- 
ator to  hire  and  discharge ;  of  the  management  of  the  mine,  and  of  the  direction 
of  the  working  forces;  this  conduct  in -violation  of  contract  on  the  part  of  the 
Mine  Workers,  as  well  as  that  mentioned  in  the  preceding  paragraph,  has 
resulted  in  more  than  one  hundred  strikes  during  the  life  of  our  scale  agree- 
ment.2 

Numerous  other  illustrations  could  be  given  from  the  records  of 
the  commission,  showing  that  there  are  other  instances  where  unions 
did  not  observe  their  contracts,  tending  to  make,  in  the  minds  of 
many  employers,  a  character  for  all  unionism,  and  thus  increasing 
their  hesitancy  in  recognizing  and  dealing  with  unions. 

RESTRICTION  OF  OUTPUT. 

Not  least  among  the  reasons  given  by  fair-minded  employers  for 
refusing  to  recognize  or  deal  with  labor  unions,  is  the  fact  that  many 
unions  stand  for  a  limited  output,  thus  making  among  their  workers 
for  the  dead  level,  and  thereby  malting  it  impossible  for  the  union 
employer  successfully  to  compete  with  the  nonunion  employer,  who 
is  not  faced  with  such  handicap. 

1  New  York  hearings,  IT.  S.  Commission  on  Industrial  Relations,  pp.  2750-2751. 

2  Now  York  hearings,  U.  S.  Commission  on  Industrial  Relations,  pp.  2061-20G2. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL   RELATIONS.  239 

British  industrial  conditions  are  cursed  with  the  practice  of  limited 
output,  as  compared  with  the  absence  of  this  practice  in  industrial 
Germany.  As  a  consequence,  Germany,  in  time  of  peace,  has  indus- 
trially outrun  Great  Britain  by  leaps  and  bounds. 

The  British  unionist,  by  practicing  limited  output,  has  thus  played 
directly  into  the  hands  of  his  keenest  industrial  competitor,  the 
German. 

The  records  of  the  commission  also  show  that  organized  labor, 
almost  as  a  unit,  is  very  strongly  opposed  to  the  introduction  in  in- 
dustry of  what  has  become  known  as  scientific  management,  or 
efficiency  methods.  In  relation  to  this  phase  of  the  problem,  we  find 
ourselves  as  one  with  the  statement  made  and  the  opinions  expressed 
by  Mr.  Louis  D.  Brandeis  before  the  commission  at  Washington,  in 
April,  1914,  who,  when  invited  to  express  his  opinion  on  the  question 
of  efficiency  standards,  scientific  management,  and  labor,  among  other 
things,  said: 

My  special  interest  in  this  subject  arises  from  the  conviction  that,  in  the 
first  place,  workingmen,  and  in  the  second  place,  members  of  the  community 
generally,  can  attain  the  ideals  of  our  American  democracy  only  through  an 
immediate  increase  and  perhaps  a  constant  increase,  in  the  productivity  of 
man.  *  *  *  Our  ideals  could  not  be  attained  unless  we  succeed  in  greatly 
increasing  the  productivity  of  man.  *  *  *  The  progress  that  we  have 
made  in  improving  the  conditions  of  the  workingman  during  the  last  century, 
and  particularly  during  the  last  50  years,  has  been  largely  due  to  the  fact  that 
intervention  or  the  introduction  of  machinery  has  gone  so  far  in  increasing  the 
productivity  of  the  individual  man.  With  the  advent  of  the  new  science  of 
management  has  come  the  next  great  opportunity  of  increasing  labor's  share 
in  the  production,  and  it  seems  to  me,  therefore,  of  the  utmost  importance,  not 
only  that  the  science  should  be  developed  and  should  be  applied  as  far  as 
possible,  but  that  it  should  be  applied  in  cooperation  with  the  representatives  of 
organized  labor,  in  order  that  labor  may  now,  in  this  new  movement,  get  its 
proper  share. 

I  take  it  that  the  whole  of  this  science  of  management  is  nothing  more  than 
an  organized  effort,  pursued  intensively,  to  eliminate  waste.  *  *  *  It  is  in 
the  process  of  eliminating  waste  and  increasing  the  productivity  of  man,  to 
adopt  those  methods  which  will  insure  the  social  and  industrial  essentials, 
fairness  in  development,  fairness  in  the  distribution  of  the  profits,  and  the 
encouragement  to  the  workingman  which  can  not  come  without  fairness. 

I  take  it  that  in  order  to  accomplish  this  result,  it  is  absolutely  essential  that 
the  unions  should  be  represented  in  the  process.  *  *  *  When  labor  is  given 
such  a  representation,  I  am  unable  to  find  anything  in  scientific  management 
which  is  not  strictly  in  accord  with  the  interests  of  labor,  because  it  is  nothing 
more  than  fair,  through  the  application  of  these  methods  which  have  been 
pursued  in  other  branches  of  science,  to  find  out  the  best  and  the  most  effective 
way  of  accomplishing  the  result.  It  is  not  making  men  work  harder — the  very 
effort  of  it  is  to  make  them  work  less  hard,  to  accomplish  more  by  what  they 
do,  and  to  eliminate  all  unnecessary  motion,  to  give  special  effort  and  special 
assistance  to  those  who,  at  the  time  of  the  commencement  of  their  work,  are 
mostly  in  need  of  the  assistance  because  they  are  less  competent. 

As  I  view  the  problem,  it  is  only  one  of  making  the  employer 
recognize  the  necessity  of  the  participation  of  representatives  of  labor  in  the 
introduction  and  carrying  forward  of  the  work,  and  on  the  other  hand,  bring- 
ing to  the  workingman  and  the  representatives  of  organized  labor,  the  recog- 
nition of  the  fact  that  there  is  nothing  in  scientific  management  itself  which  is 
inimical  to  the  interests  of  the  workingman,  but  merely  perhaps  the  practices 
of  certain  individuals,  of  certain  employers  or  concerns  who  have  engaged 
in  it. 

I  feel  that  this  presents  a  very  good  opportunity  for  organized  labor.  It 
seems  to  me  absolutely  clear,  as  scientific  management  rests  upon  the  funda- 
mental principles  of  advance  in  man's  productivity,  of  determining  what  the 
best  way  was  of  doing  a  thing,  instead  of  the  poor  way,  of  a  complete  coordi- 
nation and  organization  of  the  various  departments  of  business,  that  the  intro- 
duction of  scientific  management  in  our  businesses  was  certain  to  come;  that 


240  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

those  who  oppose  the  introduction  altogether  are  undertaking  a  perfectly  im- 
possible task ;  and  that  if  organized  labor  took  the  position  of  absolute  opposi- 
tion, instead  of  taking  the  position  of  insisting  upon  their  proper  part  in  the 
introduction  of  this  system,  and  the  conduct  of  the  business  under  it,  organized 
labor  would  lose  its  greatest  opportunity,  and  would  be  defeating  the  very  pur- 
pose for  which  it  exists. 

On  being  asked  the  question  what,  in  his  opinion,  would  be  the 
status  of  unionism  in  the  event  of  scientific  management  becoming 
a  common  industrial  condition,  Mr.  Brandeis  said: 

I  think  there  would  be  a  great  deal  left  for  unionism  to  do,  and  do  not  think 
the  time  will  come  when  there  will  not  be,  as  long  as  there  is  a  wage  system 
in  existence.  *  *  *  I  do  not  feel  that  we  have  reached  the  limit  of  the 
shorter  day,  certainly  not  in  some  employments,  nor  do  I  think  we  have 
reached  the  limit  of  the  higher  wage ;  certainly  we  have  not  reached  the  limit 
of  the  best  conditions  of  employment  in  many  industries. 

All  of  these  subjects  are  subjects  which  must  be  taken  up,  and  should  be 
taken  up  by  the  representatives  of  the  men  and  women  who  are  particularly 
interested.  There  will  be  work  for  unions  to  do  as  long  as  there  is  a  wage 
system. 

Mr.  Brandeis  further  stated  that  he  saw  no  menace  to  unionism  in 
scientific  management,  and  that  he  favored  labor  having  a  voice  in 
determining  all  the  factors  involved  in  scientific  management. 

In  answer  to  the  question  if  he  thought  the  fears  groundless  on  the 
part  of  organized  labor  in  looking  upon  scientific  management  as  a 
menace  to  unionism,  he  answered,  saying: 

Yes ;  groundless  except  for  this — I  think,  for  instance,  that  the  existence  of 
the  system  of  scientific  management,  unless  the  unions  choose  to  cooperate 
with  the  effort  to  install  it,  may  menace  unionism,  because  the  most  efficient 
and  advanced  employers  may  adopt  it,  whether  the  unions  like  it  or  not,  and  in 
that  way  these  establishments  may  become  successful,  and  be  so  buttressed 
by  their  success  as  to  be  able  to  exclude  unions  from  their  business.  That  is 
the  menace,  if  they  do  not  take  part,  but  if  they  cooperate  it  seems  to  me  it 
simply  advances  unionism. 

Mr.  Brandeis  confirmed  the  thought  that  if  unionism  is  wise  it 
will  make  the  most  of  its  opportunity  by  enlisting  its  cooperation  in 
the  movement,  and  will  endeavor  to  bring  scientific  management  to 
its  highest  possibility  at  the  earliest  day,  in  order  that  it  may  better 
share  the  increased  surplus  created  by  such  scientific  management, 
and  that  for  unions  to  work  against  it  is  in  the  nature  of  a  colossal 
error.  The  testimony  of  Miss  Ida  'Tarbell  on  this  point  was  in  full 
accord  with  that  of  Mr.  Brandeis. 

PROHIBITION    OF   USE    OF    NONUNION -MADE   TOOLS    AND    MATERIAL. 

The  sixth  reason  offered  by  employers  for  refusing  to  recognize  or 
to  deal  with  organized  labor  is  that  when  they  do  so  they  are  often 
not  permitted  to  use  nonunion-made  tools  or  materials,  thus  placing 
upon  themselves  a  burden  and  a  hardship  from  which  nonunion  em- 
ployers are  free,  and  thus  also  laying  themselves  liable  to  get  into  all 
sorts  of  controversies  with  the  union,  which  are  vexatious,  annoying, 
time-losing,  and,  frequently,  most  costly,  as  they  sometimes  lead  to 
grave  and  serious  strikes. 

CLOSED  SHOP. 

The  seventh  reason  why  many  employers  refuse  to  recognize  or  to 
deal  with  organized  labor  (and  among  these  may  be  mentioned  the 
employers  of  large  bodies  of  workers  who  have  previously  had  trade 
agreements  with  organized  labor)  is  the  matter*  of  the  closed  shop. 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  241 

Many  such  employers  are  quite  willing  to  recognize  and  to  deal 
with  unions  upon  a  tacit  or  written  open-shop  agreement,  but  they 
have  no  confidence,  based  on  their  previous  experience,  that  an  open- 
shop  agreement  will  be  respected  by  the  unions.  Such  employers 
labor  under  the  fear  that,  despite  an  open-shop  agreement  or  under- 
standing, the  union,  at  its  first  opportunity,  will  force  them  to  com- 
pel the  nonunion  worker  to  join  the  union.  Employers  such  as  these 
are  unwilling  to  place  themselves  in  the  position  where  the  union 
can  control  them  despite  an  open-shop  agreement  or  understanding 
and,  so  to  speak,  put  a  pistol  to  their  heads  and  command  them 
in  turn  to  command  a  nonunion  worker  on  pain  of  dismissal  to  join 
the  union.  Such  employers  feel  that,  having  an  open-shop  agree- 
ment or  understanding,  if  for  any  reason  a  worker  does  not  choose 
to  join  the  union,  they  as  employers  should  no  more  compel  him  to 
do  so  than  they  would  compel  him  to  join  any  particular  fraternal 
society  or  religious  body.  They  feel  that  if  they  are  working  under 
an  open-shop  agreement  or  understanding  and  such  nonunion  worker 
is  capable,  efficient,  and  has  rendered  long  and  faithful  service,  that 
they  are  doing  him  and  themselves  a  great  injustice  either  to  force 
him  into  a  union  or  to  discharge  him  because  he  will  not  join  a  union. 

Where  an  employer  enters  into  an  agreement  with  a  union  which 
does  not  stipulate  that  only  union  men  shall  be  employed  but  leaves 
the  employer  free  to  employ  exclusively  union  men  or  some  union  and 
some  nonunion  men  as  he  may  prefer,  so  long  as  he  maintains  for  all 
men  union  conditions,  that  in  such  an  event  the  union  has  no  right  to 
demand  that  the  nonunionist  should  be  compelled  by  the  employer  to 
join  the  union  or  a  strike  will  follow.  For  the  union,  under  such  con- 
ditions, to  strike,  as  it  has  done,  notably  in  the  Pennsylvania  coal 
fields,  and  as  pointed  out  also  by  W.  O.  Smith,  ex-chairman  of  the 
executive  committee  of  the  Kentucky  district  of  the  United  Mine 
Workers  of  America,  whose  statements  have  been  quoted  herein,  is 
a  violation,  on  the  part  of  the  union,  of  its  contract. 

It  may  be  held  that  unionists  working  under  an  open-shop  agree- 
ment or  understanding  always  reserve  to  themselves  the  right,  for 
any  reason  or  for  no  reason,  to  cease  to  work  alongside  of  nonunion 
men,  and  that  they  further  reserve  the  right  to  determine  the  psycho- 
logical moment  at  which  it  is  in  their  interest  to  cease  work  or  to  go 
on  a  strike  because  they  will  not  work  alongside  of  nonunion  men. 
It  is  the  fear  of  the  likelihood  of  their  doing  this  that  frightens 
off  many  employers  from  recognizing  or  dealing  with  organized 
labor.  They  feel  that  even  when  they  are  operating  under  an  open- 
shop  agreement  or  understanding  which  does  not  deny  them  the 
right  to  employ  nonunion  men  so  long  as  they  work  under  union 
conditions,  they  are  working  with  a  sword  suspended  over  their 
heads  by  a  slender  thread,  which  may  break  at  any  moment,  and  are 
liable  to  have  a  strike  on  their  hands  at  the  most  critical  time,  which 
may  spell  ruin  for  their  business.  Employers,  as  a  rule,  do  not  deem 
it  a  good  business  policy  to  invite  such  risks. 

An  impressive  example  of  this  policy  on  the  part  of  organized  labor 
was  brought  out  in  the  testimony  taken  by  the  commission  at  Lead, 
S.  Dak.  Supt.  Grier,  of  the  Homestake  IVIining  Co.,  Lead,  S.  Dak., 
at  the  hearing  held  by  the  commission  at  that  point  in  August,  1914, 
stated  that  he  had  recognized  and  dealt  with  the  Lead  City  Miners' 
38819°— 16 16 


242  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

Union  from  1877  to  1909,  with  the  understanding  that  they  were  at 
liberty  to  employ  union  or  nonunion  men  as  they  preferred.  Late  in 
October,  1909,  a  resolution  was  published  in  the  daily  papers  that 
on  and  after  the  25th  of  November,  1909,  members  of  the  federation 
would  not  work  with  those  working  for  the  Homestake  Mining  Co. 
who  failed  and  neglected  to  become  members  of  the  union  in  good 
standing;  and  in  consequence,  on  the  25th  of  November,  the  mine 
was  closed  down,  and  from  that  day  on  the  company  has  not  recog- 
nized nor  dealt  with  organized  labor. 

We  are,  however,  of  the  opinion  that  where  an  employer  enters 
into  an  agreement  with  a  union  which  stipulates  that  only  union 
men  shall  be  employed,  a  thing  which  he  has  both  a  moral  and  a  legal 
right  to  do,  the  nonunion  worker,  in  that  event,  can  have  no  more 
reason  to  find  fault  with  the  employer  in  declining  fo  employ  him 
than  a  certain  manufacturer  would  have  if  the  employer,  for  rea- 
sons satisfactory  to  himself,  should  confine  his  purchases  to  the 
product  of  some  other  manufacturer. 

CONTESTS   FOR   SUPREMACY  BETWEEN    RIVAL  UNIONS. 

Testimony  has  been  given  before  this  commission  indicating,  in 
more  than  one  instance,  that  contests  between  rival  unions,  or  fac- 
tions of  the  same  union,  have  led  to  strikes  causing  industrial  unrest 
from  which  the  worker  as  well  as  the  employer,  has  suffered  harm 
and  loss. 

ACTS  OF  VIOLENCE  AGAINST  NONUNION  WORKERS  AND  THE  PROPERTIES  OF 

EMPLOYERS. 

The  ninth  objection  raised  on  the  part  of  the  employers  against 
unionism,  which  has  been  substantiated  abundantly  by  investigation 
and  by  testimony  taken  by  the  commission,  is  the  resort  on  the  part 
of  unionists  to  violence  in  labor  troubles,  and  to  the  fact  that  union- 
ists condone  such  violence  when  committed  in  the  alleged  interest 
of  labor. 

The  most  notable  case,  of  course,  in  modern  industrial  history,  is 
that  of  the  structual  iron  workers,  which  resulted  in  the  plea  of 
guilty  on  the  part  of  the  McNamara  brothers,  for  the  blowing  up  of 
the  Los  Angeles  Times  Building,  killing  over  20  innocent  people,  and 
which  further  resulted  in  Frank  Ryan,  the  president  of  the  Struc- 
tural Iron  Workers'  National  Union,  and  a  group  of  other  labor 
union  officials,  being  convicted  and  sentenced  to  prison. 

As  a  matter  of  fact,  the  bringing  into  life  of  this  United  States 
Commission  on  Industrial  Relations  was  due  primarily  to  the  long 
series  of  crimes  committed  at  the  instance  of  the  structural  iron 
workers'  union,  wrhich  culminated  in  the  blowing  up  of  the  Los 
Angeles  Times  Building,  with  its  attendant  loss  of  life  of  innocent 
citizens,  and  which  aroused  a  state  of  public  sentiment  demanding 
that  an  investigation  be  made  by  an  impartial  Federal  body,  to 
inquire  into  the  underlying  causes  of  industrial  unrest,  the  existence 
of  which  seemed  to  be  evidenced  by  the  violent  activities  on  the  part 
of  labor  in  various  parts  of  the  country. 

Vincent  St.  John,  secretary  of  the  Industrial  Workers  of  the 
World,  in  his  testimony  before  the  Commission  on  Industrial  Rela- 


REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  243 

tions  at  a  public  hearing  in  New  York,  said  that  he  believed  in 
violence  when  it  was  necessary  to  win.  He  said  that  if  the  destruc- 
tion of  property  seemed  necessary  to  bring  results,  then  he  believed 
in  the  destruction  of  property. 

A.  Johannsen,  of  California,  State  organizer  for  the  building 
trades  of  California,  and  general  organizer  for  the  United  Brother- 
hood of  Carpenters,  in  his  testimony  before  the  United  States  Com- 
mission on  Industrial  Relations  at  Washington  in  May,  1915,  in 
speaking  of  the  reelection  of  Frank  Ryan,  president  of  the  National 
Structural  Iron  Workers'  Union,  among  other  things  thanked  the 
Lord  that  the  union  had  the  courage  to  reelect  him  president  after 
he  had  been  convicted  as  a  participant  in  the  dynamiting  crimes  of 
the  structural  iron  workers.  He  further  expressed  the  hope  that  it 
was  true  that  the  convicted  dynamiters,  after  being  reelected  to  office 
by  the  iron  workers,  were  met  by  a  procession  or  applause  at  Fort 
Leavenworth  while  on  their  way  to  prison,  and  that  President  Ryan 
performed  his  official  duties  while  there,  and  rendered  his  official 
reports  as  president  of  a  union  of  10,000  members  and  a  part  of  the 
American  Federation  of  Labor. 

In  contradistinction  to  the  opinion  of  Mr.  Johannsen,  to  the  effect 
that  he  thanked  the  Lord  that  the  union  had  the  courage  to  reelect 
Frank  Ryan  president  after  he  had  been  convicted  as  a  participant 
in  the  dynamiting  crimes  of  the  structural  iron  workers,  we  have  the 
opinion  of  Dr.  Charles  W.  Eliot,  president  emeritus  of  Harvard 
University,  who,  in  his  testimony  before  the  United  States  Commis- 
sion on  Industrial  Relations  at  New  York,  January  29,  1915,  in 
referring  to  this  very  instance,  said,  in  answer  to  the  question  as  to 
how  he  regarded  the  action  of  the  structural  iron  workers'  union  in 
reelecting  Frank  R}Tan  president  after  his  conviction  of  crime,  "As 
a  serious  moral  offense  against  the  community  as  a  whole."  1 

Speaking  about  respecting  court  labor  injunctions,  Witness  Jo- 
hannsen said: 

I  don't  think  the  power  of  an  injunction  goes  much  beyond  the  courage  of 
those  who  are  enjoined.  I  think  that  if  a  person  is  convinced  in  his  own  mind 
and  his  own  feelings  that  his  case  is  just,  that  his  demands  for  an  increase  of 
wages,  or  whatever  the  fight  may  he — if  you  think  and  feel  you  are  right,  why, 
then  go  ahead.  Never  mind  about  those  pieces  of  paper.2 

On  being  asked  whether  he  (Johannsen)  believed  that  Frank 
Ryan,  president  of  the  Structural  Iron  Workers'  National  Union, 
and  his  associates,  were  innocent  men  railroaded  to  prison,  he  said 
that  he  did,  and  that  he  wTas  satisfied  they  never  committed  any 
crime  against  labor  or  a  better  society,  and  were  therefore  unjustly 
convicted.  This  was  his  attitude,  despite  his  attention  having  been 
called  to  the  opinion  and  decision  rendered  by  the  circuit  court  of 
appeals,  including  Judges  Baker,  Seaman,  and  Kohlsaat,  against 
whose  integrity  and  fairness  no  whisper  had  ever  been  heard,  and 
who  seemingly  went  into  the  evidence  in  the  dynamiting  cases  most 
exhaustively  and  carefully,  and  who,  among  other  things,  in  their 
decision,  said — 

The  facts  thus  recited,  as  proven  by  the  Government  on  the  trial,  may  be 
mentioned  in  part  as  follows :  Almost  100  explosions  thus  occurred,  damaging 
and  destroying  buildings  and  bridges  in  process  of  erection  where  the  work 

1  Now  York  hearings,  TT.  S.  Commission  on  Industrial  Relations,  p.  1007. 

2  Washington  hearings,  May,  1915,  U.  S.  Commission  on  Industrial  Relations,  p.  958. 


244  BEPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

was  being  done  by  open-shop  concerns,  and  no  explosions  took  place  in  connec- 
tion with  work  of  a  similar  character,  where  the  work  was  done  by  closed- 
shop  concerns.  *  *  *  In  connection  with  this  work  of  destruction,  dyna- 
mite and  nitroglycerine  was  purchased  and  stolen,  and  various  storage  places 
arranged  to  conveniently  store  such  explosives  which  were  to  be  used  in  the 
destruction  of  property  in  the  various  States  referred  to.  *  *  *  Large 
quantities  of  dynamite  and  nitroglycerine  were  at  various  times  stored  in  the 
vaults  of  the  association  at  Indianapolis,  and  also  in  the  basement  of  the  build- 
ing. *  *  *  Four  explosions  occurred  in  one  night  at  the  same  hour  in 
Indianapolis,  and  explosions  were  planned  to  take  place  on  the  same  night, 
two  hours  apart,  at  Omaha,  Nebr.,  and  Columbus,  Ind.,  and  the  explosions 
so  planned  did  occur  on  the  same  night,  at  about  the  same  time,  instead  of  two 
hours  apart,  owing  to  the  fact  that  one  clock  was  defective.  *  *  *  All  the 
dynamite  and  nitroglycerine  *  *  *  including  the  expenses  incident  to 
the  stealing  of  the  dynamite,  were  paid  out  of  the  funds  of  the  international 
association,  and  these  funds  \vere  drawn  from  the  association  upon  checks 
signed  by  the  secretary-treasurer,  John  J.  McNamara,  and  the  president, 
Frank  M.  Ryan,  plaintiff  in  error. 

The  written  correspondence  on  the  part  of  many  of  the  plaintiffs  in  error 

*  *     *     furnish  manifold  evidence  not   only   of  understanding  between  the 
correspondents  of  the  purposes  of  the  primary  conspiracy,  but  many  thereof 
convey  information  or  direction  for  the  use  of  the  explosives,  while  others 
advise  of  the  destruction  which  has  occurred,  and  each  points  unerringly  not 
only  to  the  understanding  that  the  agency  therein  was  that  of  the  conspirators, 
but  as  wrell  to  the  necessary   steps   in   its  performance  of  transporting   the 
explosives  held  for  such  use.    This  line  of  evidence  clearly  tends  to  prove, 
and  may  well  be  deemed  convincing  of  the  fact  on  the  part  of  many,  if  not  all, 
of  the  correspondents. 

Plaintiff  Frank  M.  Ryan  was  president  of  the  association  and  of  its  execu- 
tive board,  and  was  active  manager  and  leader  of  the  contest,  and  policies 
carried  on  throughout  the  years  of  the  strike  and  destructive  explosions  in 
evidence.  Letters  written  and  received  by  him  at  various  stages  of  the  contest 
clearly  tend  to  prove  his  familiarity  with  and  management  of  the  long  course 
of  destroying  open-shop  structures,  however  guarded  in  expression.  He  was 
at  the  headquarters  of  the  association  for  the  supervision  of  operations  periodi- 
cally, usually  two  or  three  days  each  month,  uniformly  attended  the  meetings 
there  of  the  executive  board,  and  made  frequent  visits  to  the  field  of  activities. 

*  *     *     He  signed  all  of  the  checks  in  evidence  for  payments  for  expenditures 
for  purchase,   storage,   and   conveyance   of  explosives.     *     *     *     Many   other 
letters  in  evidence,  both  from  and  to  him,  however  disguised  in  terms,  may  well 
authorize  an  inference  of  his  complete  understanding  of,  and  complicity  for, 
the  explosions,  both  in  plans  and  execution.1 

Masses  of  testimony  were  filed  with  the  commission  to  prove  that 
organized  labor  at  times  resorted  to  a  policy  of  lawlessness.  Among 
other  documents  may  be  cited  a  magazine  under  the  title  of  A 
Policy  of  Lawlessness,  a  partial  record  of  riot,  assault,  murder,  and 
intimidation,  occurring  in  strikes  of  the  iron  molders'  union,  during 
1904,  1905,  1906,  1907,  published  by  the  National  Founders'  Asso- 
ciation, in  which  are  given,  as  a  partial  list  taken  from  court  records, 
a  great  number  of  instances  of  violence  on  the  part  of  labor  unionists 
in  labor  disputes;  and  also  a  document  published  as  a  report,  sub- 
mitted by  the  committee  on  labor  disputes  of  the  Cleveland  Chamber 
of  Commerce,  entitled  "  Violence  in  Labor  Disputes, "  giving  hun- 
dreds of  instances  where  unionists  had  resorted  to  violence  in  labor 
troubles  in  that  community  alone. 

Mr.  Luke  Grant,  special  investigator  for  the  United  States  Com- 
mission on  Industrial  Relations,  in  his  report  to  the  commission  on 

1  Washington  hearings,  May,  1915,  TJ.  S.  Commission  on  Industrial  Relations,  pp.  1004- 
1013. 


KEPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS.  245 

the  National  Erectors'  Association  and  the  International  Association 
of  Bridge  and  Structural  Iron  Workers,  says : 

Do  they  [the  unions]  believe  in  violence?  They  did  not  destroy  property 
and  they  don't  know  who  did.  They  probably  adopted  resolutions  denouncing 
the  unknown  perpetrators,  and  offering  a  reward  for  their  arrest  and  con- 
viction. The  Western  Federation  of  Miners,  in  convention,  offered  a  reward 
for  the  arrest  of  the  men  who  blew  up  the  Independence  depot  in  June,  1904, 
killing  14  men.  Harry  Orchard  afterwards  confessed  that  he  and  Steve  Adams 
did  it,  acting  as  agents  for  the  officers  of  the  union. 

In  this  way  do  union  men  collectively  approve  of  violence,  that  few  if  any 
of  them  would  individually  permit  (p.  148). 

Referring  to  the  industrial  war  between  the  National  Erectors' 
Association  and  the  structural  iron  workers'  union,  Mr.  Grant  con- 
tinues to  say: 

When  the  hopelessness  of  the  situation  became  apparent  to  the  union  officials, 
resort  was  made  to  the  destruction  of  property.  Diplomacy  was  out  of  the 
question,  so  dynamite  was  tried  (p.  150). 

The  report  of  Luke  Grant  brings  out  the  fact  that  the  structural 
iron  workers  had  no  grievances  against  their  employers  in  the  matter 
of  wages,  hours,  or  working  conditions.  The  only  question  at  issue 
was  that  of  the  closed  shop.  To  enforce  the  closed  shop,  the  struc- 
tural iron  workers  seemed  to  feel  themselves  justified  in  dynamiting 
over  100  properties  and  destroying  many  innocent  lives. 

Police  Commissioner  Arthur  Woods,  of  the  city  of  New  York,  in 
his  testimony  before  the  United  States  Commission  on  Industrial 
Relations  in  May,  1915,  at  Washington,  D.  C.,  speaking  of  violence 
by  labor  unions,  among  other  things,  said : 

The  result  of  our  investigation  shows  a  course  of  procedure  like  this :  There 
would  be  a  strike  and  the  strikers  would  retain  some  gunmen  to  do  whatever 
forcible  or  violent  work  they  needed.  The  employer,  to  meet  this  violence, 
would  in  a  comparatively  small  percentage  of  cases,  and  not  as  many  cases  as 
the  gunmen  were  employed  on  the  other  side,  hire  a  private  detective  agency. 
The  function  that  the  gunmen  were  to  perform  was  to  intimidate  the  workers 
that  were  hired  to  take  the  place  of  the  strikers.  *  *  *  There  were  three 
indictments  for  murder  in  the  first  degree. 

The  question  was  asked  Police  Commissioner  Woods  in  how  far 
his  investigations  had  warranted  the  statement  that  appeared  in  the 
New  York  Herald  of  May  14,  1915,  reading  as  follows : 

Several  of  the  indictments  mentioned  assault  upon  members  of  the  union, 
and  in  this  connection  District  Attorney  Perkins  said  last  night  that  the  reign  of 
lawlessness  was  caused  by  union  leaders  who  wished  to  perpetuate  themselves 
in  power,  who  hired  assailants  to  assault  contenders  in  their  own  unions  for 
their  places,  and  who  used  their  union  offices  to  extort  blackmail  under  threats 
from  employers.  Seven  men  are  indicted  for  assault  in  a  riot  for  control  of 
the  union.  Four  men  are  indicted  for  hiring  Dopey  Benny's  men  to  go  to  a 
nonunion  factory  and  rough-house  the  employees  as  they  left,  and  wreck  the 
plant.  A  dozen  workers  were  wounded  in  that  fight. 

Six  union  men  are  accused  of  extortion  and  assault  in  using  violence  to 
collect  a  fine  of  $100  upon  an  employer.  Four  others  are  accused  of  hiring  the 
Dopey  Benny  band  to  shoot  up  a  nonunion  factory.  Many  shops  were  fired. 
The  factory  suffered  a  damage  of  $1,000  and  several  persons  were  injured. 
Other  indictments  mentioned  cases  where  the  band  was  employed  by  union 
leaders  to  attack  nonunion  workers,  to  wreck  factories,  and  even  to  assault 
nonunion  men  who  opposed  the  leaders  (pp.  964-5). 

To  all  of  the  foregoing,  Police  Commissioner  Woods  replied, 
"  That  is  the  general  line  of  things  that  we  found." 


246  REPORT  OF   COMMISSION"   ON  INDUSTRIAL  RELATIONS. 

One  of  the  ablest  and  clearest-headed  exponents  of  the  cause  of 
labor  that  testified  before  this  commission  was  Morris  Hillquit,  of 
New  York.  In  speaking  of  violence  in  labor  troubles,  he  is  quoted 
as  saying,1  that  the  resort  to  violence  and  lawbreaking  was  "  ethically 
unjustifiable  and  tactically  suicidal."  Mr.  Hillquit  pointed  out  that 
wherever  any  group  or  section  of  the  labor  movement  "  has  embarked 
upon  a  policy  of  '  breaking  the  law '  or  using  '  any  weapon  which  will 
win  a  fight,'  whether  such  policy  was  styled  '  terrorism,'  f  propaganda' 
<of  the  deed,  '  direct  action,'  '  sabotage,'  or  '  anarchism,'  it  has  in- 
variably served  to  destroy  the  movement  by  attracting  to  it  profes- 
sional criminals,  infesting  it  with  spies,  leading  the  workers  to  need- 
less and  senseless  slaughter,  and  ultimately  engendering  a  spirit  of 
disgust  and  reaction." 

Robert  Hunter,  commenting  on  the  foregoing  statement  made  by 
Morris  Hillquit,  says  (p.  viii)  : 

It  will,  I  think,  be  clear  to  the  reader  that  the  history  of  the  labor  movement 
during  the  last  half  century  fully  sustains  Mr.  Hillquit's  position. 

APPRENTICESHIP  RULES. 

The  question  of  apprenticeships  has  led  to  much  industrial  strife 
and  consequent  industrial  unrest,  where  unions  have  arbitrarily  de- 
termined the  number  of  apprentices  that  the  employer  may  take  on. 
'  Where  this  practice  has  prevailed  the  union  employer  has,  in  com- 
petition with  the  nonunion  employer,  been  seriously  handicapped, 
The  remedy  for  this  evil  lies  obviously  in  a  joint  agreement  under  the 
direction  of  the  proposed  State  industrial  commissions,  in  which  each 
side  has  an  equal  voice  in  determining  the  proper  quota  of  appren- 
tices to  be  employed. 

In  conclusion,  it  is  our  desire  to  point  out  that  organized  labor  is 
chargeable  with  its  fullest  share  of  creating  causes  of  industrial  un- 
rest, because  of  its  sympathetic  strikes,  its  jurisdictional  disputes,  its 
labor  union  politics,  its  contract  breaking,  its  resort  to  violence  in 
time  of  trouble,  its  policy  of  limited  output,  and  its  closed  shop 
policy.  There  is  an  abundance  of  evidence  in  the  records  of  the  com- 
mission to  show  that  organized  labor  is  also  guilty  of  intimidating 
courts,  more  especially  the  lower  criminal  courts,  to  deal  lightly  with 
labor  offenders  charged  with  criminal  assaults  in  labor  troubles ;  and 
that  some  judges,  more  especially  in  the  lower  courts,  toady  to 
organized  labor  for  vote-getting  purposes,  and  dismiss  union  labor 
men  guilty  of  lawbreaking,  or  impose  on  them  nominal  penalties  out 
of  all  proportion  to  the  crimes  committed. 

These  various  policies  have  brought  about  their  fullest  share  among 
the  workers,  to  say  nothing  of  the  injury  inflicted  011  employers  and 
on  society,  of  poverty,  suffering,  wretchedness,  misery,  discontent, 
and  crime.  Organized  labor  will  never  come  into  its  own,  and  will 
indefinitely  postpone  the  day  when  its  many  commendable  objects  will 
oe  achieved  in  the  broadest  sense,  until  it  will  cut  out  of  its  program 
sympathetic  strikes,  until  it  can  prevent  cessation  of  work  in  juris- 
dictional disputes,  until  it  can  more  successfully  prevent  labor  union 
politics,  until  it  can  teach  many  in  its  rank  and  file  to  regard  more 
sacredly  their  trade  agreements,  until  it  can  penalize  its  members  for 

1  Robert  Hunter,  Violence  and  the  Labor  Movement,  p.  viii. 


BEPORT  OF   COMMISSION"   OIST   INDUSTRIAL   RELATIONS.  247 

resorting  to  violence  in  labor  disputes,  and  until  it  can  make  it  a  labor 
union  offense  to  limit  output. 

Organized  labor  may  ask,  "If  we  cut  out  the  evil  policies  com- 
plained of  from  our  program,  what  offensive  and  defensive  weapons 
will  be  left  us  with  which  to  protect  ourselves  against  the  unfair 
employer?" 

The  answer  is  that  when  labor  is  effectively  organized  it  has  two 
most  powerful  weapons  at  its  command  that  the  employer,  as  a  rule, 
dreads  and  fears  because  of  the  great  damage  these  weapons  can 
inflict  on  him,  namely,  the  strike  and  the  primary  boycott,  both  of 
which  are  within  the  moral  and  legal  rights  of  the  worker  to  use. 

Generally  speaking,  the  evils  complained  of  have  been  eliminated 
from  the  program  of  the  railway  brotherhoods.  As  a  consequence, 
railway  managers  do  not  hesitate  to  recognize  and  to  deal  with  the 
railway  unions,  to  their  mutual  advantage  and  satisfaction,  with  the 
result  that  collective  bargaining  has  become  the  common  condition 
in  the  railway  wrorld.  Railway  strikes  and  lockouts  have  now  be- 
come most  infrequent,  and  industrial  unrest  due  to  these  causes  in 
this  sphere  of  activity  has  become  greatly  minimized. 

If  these  evils  are  eliminated  by  organized  labor  from  its  program, 
much  will  have  been  done  to  stimulate  collective  bargaining  and  to 
minimize  the  existing  causes  of  industrial  unrest.  The  remedies 
for  all  these  evils  do  not  lie  with  the  employer;  they  rest  wholly  and 
solely  with  unionists.  The  responsibility  for  the  growrth  of  these 
evils,  in  our  opinion,  rests  primarily  with  unionists  who  neglect  their 
union  duties  and  who  are  as  unmindful  of  their  duties  as  union  men 
as  are  many  voters  of  their  civic  duty  who  remain  at  home  on  elec- 
tion dsij. 

We  have  faith  in  the  honesty  of  purpose,  in  the  fairness  of  spirit, 
and  in  the  law-abiding  character  of  the  American  worker,  and  we 
do  not  believe  that  the  rank  and  file  of  American  wage  earners  are 
in  favor  of  many  of  the  practices  of  some  unions  which  have  sub- 
jected unionism  to  so  much  severe,  but  just,  criticism.  We  believe 
it  is  the  duty  of  each  unionist  regularly  to  attend  the  meetings  of  his 
union  in  order  that  democracy  shall  prevail  in  trade-unions  instead 
of  an  autocracy  or  despotism,  which  inevitably  follows  where  the 
best  membership  fails  to  attend  union  meetings  and  thus  permits  the 
affairs  of  the  organization  to  get  into  the  hands  of  incompetent,  ill- 
judging,  or  dishonest  officials,  who,  for  their  selfish  ends,  abuse  the 
power  and  authority  vested  in  them. 

Wherever  there  are  found  honest,  high-minded,  clear-headed  labor 
leaders — and  in  the  course  of  our  investigations  and  hearings  we 
have  come  into  close  personal  touch  with  many  such  as  these,  who 
have  commanded  our  esteem  and  respect — it  will  be  found  that,  as 
a  rule,  they  represent  unions  where  the  better  membership  takes  a 
lively  and  active  interest  in  the  welfare  of  the  association,  and  re- 
gards it  as  a  sacred  duty  to  regularly  attend  its  meetings. 

We  say  frankly  that  if  wre  were  wage  earners  we  would  be  union- 
ists, and  as  unionists  we  should  feel  the  keen  responsibility  of  giv- 
ing the  same  attention  to  our  trade-union  duties  as  to  our  civic 
duties. 

The  ideal  day  in  the  industrial  world  will  be  reached  when  all 
labor  disputes  will  be  settled  as  a  result  of  reason  and  not  as  a  result 
of  force.  This  ideal  day  can  be  hastened  if  the  employers,  on  the 


248  REPORT  OF  COMMISSION  ON  INDUSTRIAL  RELATIONS. 

one  hand,  will  earnestly  strive  to  place  themselves  in  the  position  of 
the  worker  and  look  at  the  conditions  not  only  through  the  eye  of 
the  employer  but  through  the  eye  of  the  worker;  and  if  the  worker 
will  strive  to  place  himself  in  the  position  of  the  employer,  and  look 
at  the  conditions  not  only  through  the  eye  of  the  worker  but  through 
the  eye  of  the  employer. 

This,  of  course,  means  the  strongest  kind  of  organization  on  both 
sides.  It  means  that  employers  must  drive  out  of  the  ranks  of  their 
associations  the  law  breaker,  the  labor-contract  breaker,  and  the  ex- 
ploiter of  labor.  It  also  means  that,  in  the  interests  of  fairness, 
every  board  of  directors  of  an  industrial  enterprise  should  have 
within  its  organization  a  committee  for  the  special  purpose  of  keep- 
ing the  board  of  directors  advised  as  to  the  condition  of  their  work- 
ers. And  it  finally  means  that  trade-unions  must,  in  order  to  mini- 
mize the  causes  of  industrial  unrest,  among  other  things  remove  the 
weak  spots  in  unionism  set  forth  herein,  thereby  hastening  the  day 
when  employers  will  no  longer  fear  to  recognize  and  deal  with 
unions,  and  when  collective  bargaining  shall  thus  become  the  com- 
mon condition  . 

Finally,  we  feel  that  employers,  individually  and  through  their 
associations,  in  common  with  thoughtful  representatives  of  labor, 
should  give  their  fullest  share  of  thought  and  lend  their  heartiest  co- 
operation in  aiding  to  solve,  through  constructive  legislation  and 
other  ways,  the  great  problems  of  vocational  education,  continuation 
schools,  woman  and  child  labor,  apprenticeship,  hours  of  labor,  hous- 
ing, sickness  insurance,  workmen's  compensation,  safety  measures, 
old-age  pensions,  and  unemployment.  The  hope  is  therefore  ex- 
pressed that  employers  will  strive  to  work  with  rather  than  against 
intelligent  labor  representatives  in  aiding,  through  these  various 
movements,  to  lessen  industrial  unrest  and  to  still  further  improve 
the  condition  of  wage  earners  and  their  dependents. 

HARRIS  WEINSTOCK. 
S.  THRUSTON  BALLARD. 
RICHARD  H. 


1  Appointed  commissioner  Mar.  17,  1915,  to  serve  unexpired  term  of  Hon.  F.  A.  Delano, 
resigned. 


SUPPLEMENTAL    STATEMENT    OF    COMMISSIONER    S.    THRUSTON 

BALLARD. 

The  law  creating  the  United  States  Commission  on  Industrial  Re- 
lations, in  additon  to  other  things,  says :  "  The  commission  shall  seek 
to  discover  the  underlying  causes  of  dissatisfaction  in  the  industrial 
situation  and  report  its  conclusions  thereon." 

The  causes  of  industrial  unrest  may  be  put  under  five  main  groups : 

First.  Low  wages. 

Second.  Unemployment,  through  seasonal  occupations,  periods  of 
depression,  accidents,  and  sickness. 

Third.  The  development  of  large  industries. 

Fourth.  Long  working  hours  and  insanitary  conditions. 

Fifth.  Unsatisfactory  rural  conditions. 

I  will  analyze  each  of  these  groups  separately. 

First.  Low  wages,  with  all  the  attendant  evils,  I  consider  the  prime 
cause  for  industrial  unrest. 

One  of  the  chief  factors  in  wage  depression  is  undoubtedly  the 
encouraged,  stimulated,  and  probably  assisted  immigration  which  has 
brought  to  our  shores  millions  of  unskilled  workers  in  the  last  few 
years.  These  immigrants,  coming  from  those  countries  where  vastly 
lower  wage  rates  prevail,  develop  in  America  a  wage  competition  of 
whch  the  employer  naturally  takes  advantage. 

The  European  war  will  probably  relieve  this  immigration  situation 
for  the  next  few  years,  but  it  is  a  question  to  which  our  Government 
must  give  serious  consideration  in  the  near  future. 

Inefficency  of  the  unskilled  worker  is  also  a  contributory  cause  of 
low  wages.  The  average  applicant  for  work  is  irresponsible  and 
untrained. 

With  all  our  vaunted  free-school  system,  our  industrial  education. 
is  deplorable.  In  our  large  cities  they  are  beginning  to  consider  the 
question  seriously,  but  our  rural  schools  are  lamentably  deficient. 
This  inefficiency,  which  tends  to  lower  the  whole  standard,  can  be 
corrected  only  through  improved  educational  facilities. 

Government  assistance  should  be  given  to  aid  in  the  establishment 
of  vocational,  trade,  and  continuation  schools  as  a  part  of  our 
public-school  system. 

The  gravitation  of  industries  into  large  units  has  caused  the 
skilled  worker  to  be  supplanted  by  the  unskilled,  who  becomes  merely 
a  cog  in  the  wheel  of  the  great  machine,  performing  the  monotonous 
duties  that  anyone  could  easily  do  after  a  few  weeks'  practice. 

The  wages  of  the  unskilled  laborer  are  so  pitifully  small  that  it  is 
almost  impossible  for  him  to  maintain  a  family,  even  with  the  most 
rigid  economy. 

I  suggest  as  the  only  remedy  for  low  wages,  due  to  these  conditions, 
the  enactment  of  a  national  minimum  wage  law. 

249 


250  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

Second.  Under  the  second  cause  of  industrial  unrest — unemploy- 
ment— we  have  seasonal  occupations,  as,  for  example,  ice  cutting  and 
logging  in  winter,  harvesting  and  fruit-picking  in  summer. 

This  problem  will  always  be  with  us,  and  should  be  dealt  with 
through  an  efficient  system  of  national  employment  agencies,  to  be 
administered  by  the  Federal  Government. 

Private  employment  agencies  have  proved  inadequate;  have  even 
in  many  cases  been  used  to  exploit  the  worker.  I  therefore  strongly 
recommend  that  all  employment  agencies  be  managed  by  the  Gov- 
ernment. 

We  have  also  unemployment  due  to  periods  of  depression.  The 
Federal  employment  agencies  would  take  care  of  these  cases,  bring- 
ing, when  possible,  the  man  and  the  job  together,  but  in  periods  of 
long  depression,  when  no  work  is  to  be  found,  Government,  State, 
and  municipal  work,  which  had  been  held  in  reserve  for  this  pur- 
pose, should  then  be  provided. 

Should  all  these  resources  be  exhausted  and  there  still  remain  un- 
employed workers,  there  should  be  Government  concentration  camps 
where  work  with  a  small  wage  would  be  provided,  supplemented  by 
agricultural  and  industrial  training. 

The  fear  of  unemployment  because  of  accident  or  illness  fosters  a 
feeling  of  discontent  which  tends  to  cause  industrial  unrest. 

Workmen's  compensation  laws  and  sickness  insurance,  with  proper 
restrictions,  would  be  the  proper  correctives  here. 

Workmen's  compensation  laws  thus  far  developed  protect  the  man 
only  when  accident  occurs  during  working  hours,  and  this  is  paid  for 
entirely  by  the  employer.  If  an  accident  occurs  causing  injury  to  a 
man  just  before  entering  his  work  place,  the  consequent  loss  to  his 
family  is  just  as  great  as  though  he  had  been  hurt  five  minutes  later 
within  the  factory  walls,  and  yet  he  receives  nothing. 

I  therefore  recommend  that  the  workmen's  compensation  law 
should  provide  insurance  against  accident  wherever  and  whenever 
caused.  This  insurance,  however,  should  be  paid  by  the  man  him- 
self, his  employer,  and  the  Government  jointly.  The  same  idea 
should  apply  also  to  sickness  insurance. 

The  worker  himself  should  feel  these  responsibilities  and  should 
always  share  the  expense  of  such  insurance. 

Third.  We  have,  as  the  third  cause  for  industrial  unrest,  the  de- 
velopment of  large  industries  with  their  absentee  ownership.  Large 
business,  properly  controlled,  is  an  economic  benefit,  but  the  very 
size  makes  coordination  betwreen  the  employers  and  workers  most 
difficult.  There  is  no  personal  contact,  hence  a  lack  of  sympathy 
and  understanding. 

Where  a  few  cents  per  day  in  the  wage  of  the  individual  workman 
means  hundreds  of  thousands  of  dollars  annually  to  the  business, 
and  where  there  are  so  many  units  that  one  foreman  can  be  pitted 
against  another  to  maintain  the  cost  of  production  at  the  lowest 
possible  point,  the  natural  tendency  is  to  depress  the  wage. 

As  to  the  remedy,  I  would  suggest  that  all  corporations  doing 
interstate  business  be  required  to  take  out  a  national  charter  that 
will  entail  certain  responsibilities  and  possibly  grant  certain  im- 
munities from  State  control. 

This  charter  should  not  allow  overcapitalization.  Each  board  of 
directors,  in  addition  to  its  other  committees,  should  have  a  labor 


REPOBT  OF  COMMISSION   ON  INDUSTRIAL  RELATIONS.  251 

committee  whose  duty  it  should  be  to  become  thoroughly  acquainted 
with  the  labor  conditions  of  the  business,  and  make  regular  reports 
thereon  to  the  board.  These  reports  should  be  published  with  the 
financial  and  other  reports,  and  thus  give  the  stockholders  a  thorough, 
understanding  of  the  business. 

Fourth.  Long  working  hours  and  insanitary  conditions  are  addi- 
tional factors  in  the  problem  of  industrial  unrest.  Nothing  affects 
the  man's  physical  well-being,  and  consequently  his  earning  power, 
more  than  these. 

The  remedy  will  be  found  in  publicity  and  legislation,  with  factory 
inspection  by  competent  Government  officers. 

Personal  experience  for  a  number  of  years  convinces  me  that  in 
continuous  occupation,  workmen  will  do  more  work  and  better  work 
on  an  8-hour  basis  than  on  12,  and  that  one  day  in  seven  for  rest 
must  be  allowed  if  the  man  is  to  develop  the  fullest  degree  of 
efficiency. 

I  therefore  favor  a  national  eight-hour  law  for  Continuous  labor. 

Sanitary  conditions  of  work  I  have  found  to  be  a  paying  proposi- 
tion to  the  employer,  as  well  as  just  and  beneficial  to  the  worker. 

Fifth.  With  regard  to  unsatisfactory  rural  conditions,  I  view  with 
real  concern  the  fact  that  our  small  landowners  are  becoming  ten- 
ants, while  the  small  farms  are  passing  into  the  hands  of  a  few. 

Everything  possible  should  be  done  to  aid  and  encourage  our 
farmers ;  the  United  States  Government  should  adopt  a  plan  for  the 
scientific  distribution  of  our  agricultural  products,  and  for  a  rural- 
credit  system,  as  it  is  practiced  to-day  in  some  foreign  countries. 

Unsatisfactory  rural  conditions  which  make  it  difficult  for  the 
small  farmer  to  earn  a  decent  livelihood  for  his  family  cause  many 
poorly  equipped  young  men  and  women  to  flock  to  the  cities.  As  a 
rule,  they  are  thoroughly  inefficient  and  lamentably  ignorant  of  the 
temptations  of  city  life,  and  are  rarely  able  to  earn  a  living  wage. 

Life  on  the  farm  should  be  made  sufficiently  attractive  and  lucra- 
tive to  induce  these  boys  and  girls  to  remain  there.  This  can  be 
done  only  through  our  rural  schools,  which  are  now  most  inadequate. 

The  education  of  country  children  must  fit  them  for  country  life. 
No  love  of  the  beautiful,  no  patriotic  gratitude  to  his  country  for 
his  education  can  be  felt  by  the  child  who  spends  weary  months  in 
uncomfortable  hovels,  where  he  receives  impractical  and  frequently 
useless  instruction. 

Our  Government  should  aid  the  States  in  establishing  comfortable 
rural  schools,  with  longer  terms  and  with  better-paid  and  better- 
equipped  teachers. 

In  every  rural  school  there  should  be  departments  of  household 
arts — that  is,  cooking,  sewing,  and  millinery — and  manual  training 
and  agriculture.  These  schools  should  be  open  for  agricultural  in- 
struction throughout  the  summer — in  fact,  each  one  should  become  an 
experiment  station  for  the  neighborhood.  The  schoolhouse  should 
be  the  social  center — the  meeting  ground  for  instruction  and  social 
pleasures. 

In  order  to  satisfactorily  carry  out  the  suggestions  contained  in 
this  report,  it  would  be  necessary  to  have  a  nonpartisan  commission 
in  charge  of  industrial  questions,  as  suggested  by  the  majority  report 
of  this  commission. 


252  REPORT  OF   COMMISSION   ON   INDUSTRIAL  RELATIONS. 

This  would  require  large  additional  revenue,  which  must  be  de- 
rived by  some  form  of  taxation. 

The  fairest  of  all  taxes  are  the  income  and  inheritance  taxes.  This 
question,  however,  must  be  carefully  studied  and  weighed,  since  the 
tax  is  paid  by  one  class  while  the  benefits  are  largely  enjoyed  by 
another. 

Care  should  be  taken  that  it  does  not  become  confiscatory,  and  thus 
stifle  individual  incentive  and  effort. 

In  addition,  I  believe  that  every  individual  should  pay  his  propor- 
tion, no  matter  how  small  it  may  be.  It  will  inspire  in  him  a  feeling 
of  citizenship  and  make  him  an  integral  part  of  our  Nation. 

S.  THRUSTON  BALLARD. 


Ill 


Report  of  Commissioner  John  B.  Lennon 
on  Industrial  Education 


SIGNED  BY 


Commissioners  Lennon,  O'Connell,  Garretson, 
Ballard,  and  Walsh 


253 


REPORT  OF  COMMISSIONER  JOHN  B.   LENNON  ON  INDUSTRIAL 

EDUCATION. 


The  Commission  on  Industrial  Relations  gave  careful  study  and 
investigation  to  the  subject  of  industrial  or  vocational  education. 
We  found  the  general  subject  of  education,  whether  academic,  cul- 
tural or  industrial,  so  exceedingly  important  and  interesting  to  all 
classes  of  citizens  as  to  warrant  a  brief  statement  covering  especially 
the  subject  of  the  pressing  need  for  industrial  education  and  the 
bearing  that  such  education  would  have  upon  industrial  unrest. 

The  terms  "  vocational "  or  "  industrial "  education  are  used  to 
indicate  the  training  given  in  many  varieties  of  schools  and  by  many 
different  modes  of  teaching.  Our  attention  has  been  almost  entirely 
confined  to  a  study  of  that  kind  of  education  which  has  to  do  with 
the  preparation  of  boys  and  girls  for  useful  employment  in  industry, 
particularly  as  applied  to  mechanical  and  agricultural  employment. 

DEMAND  FOR  INDUSTRIAL  EDUCATION. 

The  great  importance  of  this  subject  appears  to  be  fairly  well 
appreciated  by  every  class  of  our  citizenship,  trade-unions,  employers' 
organizations,  educators,  merchants,  legislators,  etc.  The  universal 
interest  in  this  subject  warrants  the  conclusion  that  its  proper  solu- 
tion is  of  paramount  importance  to  the  welfare  of  the  Nation,  in 
order  to  establish  that  kind  of  education  that  will  enable  the  boys  and 
girls  of  the  United  States  to  enter  upon  their  industrial  life  properly 
equipped  to  make  their  lives  a  success.  Our  attention  has  been 
forcibly  called  to  the  fact  that  the  great  mass  of  the  wageworkers 
are  without  any  accumulated  means.  Their  children  are  therefore 
compelled  to  enter  gainful  pursuits  at  an  early  age.  Therefore  the 
great  need  that  our  system  of  education  should  be  so  constructed 
as  to  equip  these  boys  and  girls  with  vocational  and  industrial 
knowledge  that  would  make  them,  from  the  beginning,  useful  work- 
ers, enabling  them  to  earn  and  demand  a  living  wage  and  treatment 
that  will  not  be  injurious  to  their  future  welfare,  as  well  as  the 
opportunity  to  advance  from,  time  to  time  in  their  chosen  occu- 
pations. 

Among  the  tramps  and  hoboes,  also  in  the  ranks  of  those  who  are 
employed  only  when  labor  is  scarce,  we  have  found  thousands  of 
graduates  of  grammar  and  high  schools,  some  even  having  the  ad- 
vantage of  a  university  education,  indicating  that  however  cultural 
their  education  may  have  been  it  was  not  always  of  practical  value 
in  the  mill,  in  the  shop,  or  on  the  farm. 

Private  trade  schools  can  not  remedy  this.  They  are  operated 
generally  in  the  interest  of  employers  and  do  not  give  the  most  im- 
portant element  of  education — namely,  the  interest  of  the  workers 
themselves — the  consideration  it  deserves. 

255 


256  REPORT  OF   COMMISSION   ON  INDUSTRIAL  RELATIONS. 

The  private  training  school  can  not  cover  this  problem.  All  boys 
and  girls  require  this  practical  equipment,  and  it  can  be  secured  only 
through  and  in  connection  with  our  system  of  public  schools.  To 
properly  perform  this  duty,  the  general  responsibility  rests  on  all 
our  people.  It  is  a  public  and  not  a  private  function,  and  the  State 
and  Nation  must  be  held  responsible  for  its  early  and  successful 
solution. 

The  needs  of  modern  industry  do  not  seem  to  be  met  by  any  exist- 
ing scheme  of  training  for  general  usefulness  in  the  crafts  or  for 
the  development  of  all-around  mechanics.  Therefore,  the  pressing  need 
is  for  a  general  educational  policy  that  will  make  possible  a  con- 
tinuous development  of  both  adults  and  minors  in  industry  who  are 
over  14  years  of  age.  Boys  or  girls  who  go  into  the  shop  at  14  or 
Jater  develop  into  specialists  but  not  mechanics.  If  for  any  reason 
they  lose  their  job  they  are  no  more  fit  for  another  place  than  they 
were  when  they  first  began.  The  work,  therefore,  that  must  be  done 
for  those  already  in  industry  is  to  train  them  to  fit  into  work  wher- 
ever help  is  required  in  the  shop. 

Our  public  schools  must  be  prepared  and  required  not  only  to  give 
some  vocational  consideration  to  pupils  over  14  years  of  age  who 
remain  in  the  schools,  but  to  provide  for  compulsory  continuation 
daytime  schools  on  the  time  and  at  the  expense  of  employers,  and 
voluntary  night  schools  for  both  academic  and  vocational  training 
for  boys  and  girls  who  are  at  work  and  for  adults  who  desire  further 
knowledge  which  will  be  of  use  in  their  vocation. 

We  hold  that  all  experience  shows  conclusively  that  public  instruc- 
tion privately  controlled  or  any  plan  that  fails  to  comprehend  the 
entire  number  of  pupils  in  the  United  States  is  dangerous  and 
unworthy  of  support. 

We  hold  that  the  advantages  of  vocational  education  should  be 
open  to  all  adults  or  minors  in  the  public  schools  if  they  remain  after 
14  years  of  age,  and  in  night  schools  and  continuation  schools  after